On August 14, 2012, the Department of Health and Human Services took one step closer to implementation of the Affordable Care Act health insurance exchanges by releasing the final version of its Blueprint for Approval of Affordable State-based and State Partnership Insurance Exchanges. This document includes the declaration letter and application form which must be submitted by a state that elects to operate a state-based or partnership exchange. The document was released in conjunction with the first of four regional implementation fora that HHS is holding in Washington, Atlanta, Chicago, and Denver in August to discuss exchange implementation with states and stakeholders.
The final Blueprint is very similar to the Draft Blueprint released by HHS in May, which I described in an earlier post. The Blueprint describes the respective functions of the state and federal government in a full state-based, state partnership, and federally facilitated exchange. Even in a full state-based exchange, the state can cede certain functions to the federal government, such as responsibility for determining eligibility for exemptions and for premium tax credits and cost-sharing reduction payments, and for operating the risk adjustment and reinsurance programs. Conversely, even in a full federally facilitated exchange, states can operate the reinsurance program and make Medicaid determinations.
The application part of the Blueprint is essentially a checklist of the activities and characteristics of an exchange, including legal authority and governance; consumer and stakeholder engagement and support; eligibility and enrollment; plan management; risk adjustment and reinsurance; the SHOP (small business) exchange; organization and human resources; finance and accounting; technology; privacy and security; oversight, monitoring, and reporting; and contracting, outsourcing, and agreements.
What’s New In The Final Blueprint?
There are only a few changes between the Draft and Final Blueprints. The most significant is probably the recognition of a new category of “in-person assistance programs,” distinct from the navigator programs. The ACA prohibits the payment of navigators out of state establishment grant funds. But consumer assistance will be necessary prior to time the exchanges become self-supporting from user fees in 2014. The consumer assistors can be funded from establishment grants and will help bridge the gap during the initial open enrolment period in 2013. They may continue to play a role after that time.
There are also new provisions in the Blueprint recognizing the regulatory role of the states with respect to navigators in the federally facilitated exchanges. The navigator program was a major topic of discussion at the National Association of Insurance Commissioners summer meeting in Atlanta, August 9 to 14. Brokers and agents appear to see navigators as competitors and want to see individual navigators regulated much like agents.
Consumer advocates envision a program like the Medicare State Health Insurance Assistance (SHIP) program, in which organizations will receive navigator grants and carry out consumer assistance activities through employees or volunteers, with accountability resting primarily at the organizational level. Navigators will assist consumers, like agents and brokers, but will be different from agents in that they will not sell insurance The Blueprint calls for oversight to ensure that navigators are properly trained, avoid conflicts of interest, and protect the privacy and security of consumers. These are requirements on which everyone can agree.
The Final Blueprint also gives greater attention than did the Draft to regulation of web-based brokers. Although web-based brokers can play an important role in bringing enrollees to the exchange, consumer advocates have expressed concern about the role web-based plan chooser tools can play in shaping consumer decisions. The Blueprint calls for close oversight of web-based brokers.
Finally, the Final Blueprint drops the requirement found in the Draft Blueprint that states have a plan for transitioning enrollees from state high risk pools, recognizing that the ACA does not require that state high risk pools end when the exchanges begin (unlike the federal Preexisting Condition High Risk Pool, which does end).
National Association Of Insurance Commissioners (NAIC) Developments
The NAIC Health and Managed Care Committee approved five exchange white papers at its summer meeting, covering network adequacy, form review, rate review, accreditation and quality, and marketing and consumer information. These should be very helpful to states pursuing exchanges. On August 8, immediately preceding the NAIC summer meeting, the NAIC System for Electronic Rate and Form Filing (SERFF) held a full day informational session to describe the progress it is making in creating a system for health insurers to file information that exchanges will need on qualified health plans. At its summer meeting, the NAIC also created a new subgroup to discuss issues affecting states that choose not to establish exchanges. Finally the NAIC consumer representatives released a comprehensive guide for state and federal regulators for implementing ACA insurance reforms.
Finally, on August 15, 2012, HHS updated its Paperwork Reduction Act Notice on data collection for the healthcare.gov website. Beginning in September, HHS will collect from plans most of the information contained in the new Summary of Benefits and Coverage so that consumers can comparison shop for health plans online. All of the information on the SBC will be available at healthcare.gov, except for the material on the last page, including the coverage examples. As the coverage examples are one of the most useful tools of the SBC for plan shoppers, it is odd that this was left off. Healthcare.gov will also collect more information on small group plans and association plans, empowering small employers who shop online.
Catching Up On Implementation News
On July 20, 2012, HHS released a final rule on data collection to support standards related to essential health benefits and recognition of entities for accreditation of qualified health plans. The final rule came only a month and a half after HHS had published a proposed rule, warp speed for federal rulemaking, but the September 30 deadline for states to identify EHB plans is fast approaching, and states need the data to identify EHB plans.
The data collection rule addresses data that must be submitted to HHS by the issuers of the three largest small group products in each state regarding its highest-enrollment health plan. “Health plan” is defined under the rule to include riders that are part of the plan. Data that will be collected includes quantitative limits on coverage.
Under the proposed rule, data was also to be collected on non-quantitative limits, such as step therapy or prior authorization. Under the final rule this requirement was dropped. This presumably means that non-quantitative limits will not be part of the EHB, but it is unclear whether such limits will be relevant in some way to determining EHB compliance. The actual data that must be collected is listed here.
The final rule on accreditation preserves the two-phase approach to certifying accreditors proposed earlier. It explicitly recognizes the NCQA and URAC as accreditors for the first phase (for 2014 and 2015), contingent on their providing specific information within 60 days demonstrating that they meet ACA requirements. The final rule retains the requirement of accreditation at the product-type level (rather than at the issuer level on the one hand, or metal-tier level on the other), but exceptions can be granted when a particular product has too small an enrollment to allow a methodologically-sound analysis of the product. Accreditors must submit to the exchange-specific data on accredited plans, but may not submit personally identifiable data.
For phase one accreditation, the rule identifies fairly minimal requirements, but in response to comments the preamble suggests that additional requirements will be considered for phase two (for 2016 and following).