Federal officials announced new rules Monday giving states more flexibility in creating insurance exchanges required under the health reform law. That flexibility includes bending...

Federal officials announced new rules Monday giving states more flexibility in creating insurance exchanges required under the health reform law.

That flexibility includes bending the deadline for having an exchange certified as ready, and allowing states to partner with the federal government to run parts of their exchange operations.

How the new rules will play out in Georgia remains unclear. Gov. Nathan Deal, though strongly opposed to the reform law, has formed a committee on health exchanges. It had its first meeting at the state Capitol in June.

Health exchanges are envisioned as online shopping malls where individuals can compare and buy insurance. Their purpose is to boost the insurance-buying power of individual consumers and small businesses.

The Affordable Care Act, as the reform law is officially known, requires states to have health insurance exchanges running in January 2014. That’s when the law — if it’s upheld in the courts — is to be fully implemented. If Georgia or any other state does not establish an exchange on its own, the law says, the federal government will run the operation in that state.

States are required to prove they are ready to run their exchanges a year before the deadline — in January 2013. But HHS announced Monday that states could receive “conditional approval’’ for their exchanges on the 2013 date if they have made significant progress.

And states that get ready later can still set up their own exchange – as long as they give the federal government a year’s notice.

Such a change would ease the time pressure on Georgia.

Previously, the state needed to pass enabling legislation in the next session of the General Assembly — in early 2012 — or miss its deadlines and face a permanent loss of control over the exchange process. Now it appears the state can start its own exchange in 2015 or perhaps even later if it’s not ready at the outset.

During the 2011 General Assembly session, a Republican-backed bill to set up the governance of exchanges in Georgia ran into strong Tea Party opposition, which led to its demise.

Deal told the exchange panel in June that its effort to reshape the health insurance marketplace will be valuable, and could eventually make coverage more accessible and available.

The exchanges will offer one-stop shopping for individuals and small business owners and will provide a basic level of coverage. The health insurance market is broken for small businesses and individuals, said HHS Secretary Kathleen Sebelius on Monday. With little transparency available, she said, “shopping for coverage can be a headache.”

The new rules allow states to decide whether their exchanges should be local, regional or operated by a nonprofit organization, how to select plans to participate, and whether to partner with HHS to divvy up the work.

“States are leading the way in implementing health reform, and today’s announcement builds on that momentum by giving states flexibility to design the exchange that works for them,” said Center for Consumer Information and Insurance Oversight Director Steve Larsen in a statement. “This regulation allows us to meet states where they are.”

Bloomberg reported that the exchange rules create a “risk-adjustment” program that would take money from insurers in a state with low-cost patients and give it to plans whose customers have the highest medical bills. The policy applies both to insurers selling coverage within the exchanges and those operating independently, Bloomberg said.

A government-run reinsurance program also will help cover the most costly patients with chronic conditions for three years starting in 2014, Bloomberg said.

In its announcement Monday, HHS released more than 200 pages of rules on running health exchanges.

Despite lobbying from consumer groups, insurers will be allowed to hold seats on exchange oversight boards, and states will not be required to negotiate with health plans on price or benefit offerings, Kaiser Health News reported.

About 9 million Americans are expected to use the exchanges in the first year — growing to 23 million by 2018.

Consumers who qualify for assistance will receive federal subsidies or tax credits to purchase coverage.

 

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Andy Miller

Andy Miller is editor and CEO of Georgia Health News

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