Exchange Operations Regs Due Next
Recently at a Bipartisan Policy Center forum, CMS said the health insurance exchange regulations from HHS will cover enrollment and eligibility requirements. As we saw firsthand with the messy launch of Medicare Part D in 2006 -- one plagued by enrollment and eligibility SNAFUs for the first 6 months of the program, which kept thousands of beneficiaries from their needed medications -- the guidance can't come soon enough to ensure states and health plans have sufficient time and resources to get ready.
CMS said the forthcoming rule has a number of guiding principles:
- While it will be difficult given the intricacies of coordinating dozens of databases of healthcare consumer eligibility information, HHS is committed to flexibility for the states in figuring it out. The ACA requires the exchange to be a one-stop shop for determining eligibility in either the exchange, Medicaid, the Children's Health Insurance Program, or employer subsidies.
- There are wildly different eligibility rules for Medicaid, CHIP and the exchange subsidies, so streamlining those rules and procedures — such as for income verification — is key.
- ACA put emphasis on a simple enrollment process, for a simple reason: the vast majority of US citizens have never actually bought health insurance on their own. Most is provided through your employer, with the help of a friendly local broker. Exchanges need to be able to take a relatively small amount information from a consumer and be able to determine their eligibility for a range of healthcare subsidies, in near-real time. Simple for the consumer -- a monster for states and health plans to figure out. This is building the healthcare equivalent of Orbitz or Travelocity from a green field, to be presented to consumers who for the most part will have no idea what they're doing.
CMS said the eligibility and enrollment guidance will be coming "soon" but as is customary, wouldn't specify, though the draft reg has been submitted to OMB for approval, which means we can expect it in the next 60-90 days. And once that happens, the sluggish exchange planning process occurring in the states will get shot out of a cannon.
Collaboration and Partnership with CMS
Having spent my government career at CMS, it was interesting for me to listen to current CMS officials Steve Larsen (CCIIO) and Cindy Mann (Medicaid) describe the many opportunities for states and other stakeholders to participate in the development of federal policy for Health Exchanges that were authorized by the Affordable Care Act.
The discussion took place at today's meeting on Insurance Exchange Development sponsored by the Bipartisan Policy Center and the Kaiser Family Foundation.
Steve Larsen described the partnership hybrid model where CMS and States could jointly administer State Exchanges with the federal government performing functions that states would effectively outsource to CMS. Cindy Mann described upcoming state collaboratives where states and CMS would sit together and jointly develop guidance for state exchanges.
The clear message is that the federal government does not have all of the solutions and that there is no "one size fits all" . The new CMS Innovation Center also conveys a strong message of public-private partnerships and consistently seeks ideas and solutions from stakeholders to improve the health care system. This is clearly a different era from my early days at CMS when the tradition was to seek input only through a formal regulatory comment process. CMS is now a "Learning Organization" -- just in time to lead the expected huge changes in health care.
GHG Overview and Analysis: NPRM on Exchanges
On July 11, 2011, the Center for Medicare and Medicaid Services (CMS) released two proposed rules to implement provisions of the Affordable Care Act (ACA) which authorize competitive marketplaces known as Affordable Insurance Exchanges, or "Exchanges," where individuals and small employer groups can compare private health insurance options on the basis of price and quality, enroll in qualified health plans and receive federal subsidies (or determine eligibility for other health programs such as Medicaid and CHIP). The Exchanges are effective beginning January 1, 2014.
- CMS-9989-P - Establishment of Exchanges and Qualified Health Plans
- CMS-9975-P - Standards Related to Reinusrance, Risk Corridors, and Risk Adjustment
- In addition, CMS issued a preliminary impact analysis
As promised, the GHG policy team has developed a summary and analysis of the release.
Please feel free to direct your comments to ghg@ghgadvisors.com, and/or leave your thoughts here as well.
Surprises in the Proposed Exchange Regulation
On July 11 HHS released the proposed Exchange regulation that will govern the new health care marketplace beginning in 2014. One of the issues that surprised me was the lack of detail on consumer protection.
While there are many and perhaps even competing provisions impacting consumer information e.g. from the Exchanges, call centers, new Navigator programs, and agents and brokers, there are few regulatory requirements on consumer protection.
As I read the proposed regulation, the QHP marketing practices and consumer appeals will be governed by state law and state insurance department oversight. While many states do an excellent job in these areas, we know from the Medicare Advantage experience that there were many undetected marketing abuses due to lack of state resources to oversee and enforce requirements.
Given current and worsening state budgetary situations, there may be a need for careful monitoring of early warning signs of consumer problems in the new Exchanges and qualified health plans. Consumer complaints and appeals should be the canary in the coal mine.
Exchange Regs Released!
Is that steamy summer novel not quite holding your interest? Luckily, CMS has stepped in with its latest publication, "Patient Protection and Affordable Care Act; Establishment of Exchanges and Qualified Health Plans." While this work may not make the New York Times best seller list, this initial attempt at defining the exchanges at a Federal level will be one of the most important pieces of regulation released this year. From the summary:
"This proposed rule would implement the new Affordable Insurance Exchanges
("Exchanges"), consistent with title I of the Patient Protection and Affordable Care Act of 2010
(P.L. 111-148) as amended by the Health Care and Education Reconciliation Act of 2010 (P.L.
111-152), referred to collectively as the Affordable Care Act. The Exchanges will provide
competitive marketplaces for individuals and small employers to directly compare available
private health insurance options on the basis of price, quality, and other factors. The Exchanges,
which will become operational by January 1, 2014, will help enhance competition in the health
insurance market, improve choice of affordable health insurance, and give small businesses the
same purchasing clout as large businesses."
Stay tuned for analysis by the GHG policy team in the coming days. Until then, happy reading.
As always, we welcome your comments, feedback and questions.
Exchange Will Do You Good
Two interesting items have been posted in recent weeks that perfectly capture the contrary motion of health reform implementation. The first, found in the Washington Post, addresses the laggard's pace many states are keeping in implementing provisions of health reform--- in particular the health insurance exchanges that subsidize the purchase of private insurance by low and middle income citizens. The controversial second, which appears this month in a McKinsey newsletter describes the incredible market pressures to do just that.
For years, Washington wonks and informed political spectators have marveled at the left's inability to tie the issue of health care coverage to the interests of small businesses, which politicians of both persuasions never miss an opportunity to refer to as "the engine of the American economy." Money that goes to high employee premiums does not go to creating jobs--- at least, not for the small business in question. The McKinsey article projects that 30% of employers will "definitely or probably" stop offering health insurance to employees after 2014 (the schedule date of exchange implementation) and that more than 50% of companies with a high awareness of the health care law will simply stop offering insurance and send employees to Exchanges. Wowza.
There are a number of interesting things about this extraordinary (if it turns out to be true) change in coverage: first, the tremendous churn of beneficiary eligibility across subsidy levels just got more interesting, as a new class of pseudo employer-sponsored beneficiaries floods the market. Second, the risk pool changes. Lastly, if you make your living selling small group business policies, it may be time to open that Ebay store because your job is a whole heck of a lot less secure beginning in 2014. You'll be in good company. Many state Governors may find themselves in the same boat if they do not implement the exchanges in a timely manner, thereby depriving small businesses of the ability to make coverage the Government's problem and find more productive uses of capital. To do so gives the opposition party a golden talking point going into the 2012 elections.