HHS Unveils Proposed Regulations for the Creation of Health Insurance Exchanges
by
Traci McGuire 
On July 11, 2011, the U.S. Department of Health and Human Services (HHS) unveiled a proposed regulation for state-based health insurance exchanges. A health insurance exchange, also known as HIX (distinct from HIE, Health Information Exchange), is a marketplace that offers purchasers of health insurance a variety of plans from different insurance providers. State-run exchanges are a central provision of the new health care reform (Patient Protection and Affordable Care Act). These Exchanges were created as a governmental or quasi-governmental entity to help insurers comply with consumer protections, and to compete in cost-efficient ways, and to facilitate the expansion of insurance coverage to more people. Exchanges themselves are not insurers, so they do not bear risk themselves; instead they determine which insurance companies are allowed to participate in them. The purpose is to revolutionize health care choices and help reduce the growth in health care spending by encouraging competition on price and quality, not benefit manipulation or efforts to exclude needy patients.
Under the new proposed rules, by January 2014, states must create insurance exchanges that provide coverage options for individuals and small businesses. The draft proposal allows states to choose to administer their own Exchanges, or ask the federal government to run the Exchanges for them.
Exchanges will make it easy for individual consumers and small businesses to compare health plans, get answers to questions, and enroll in or offer to their employees a health insurance plan that meets their needs.
Of specific interest to businesses, beginning in 2014, Exchanges will operate a Small Business Health Options Program (SHOP). SHOP is a program that offers small employers and their employees new choices. Through the SHOP, employers can choose the level of coverage they will offer (for example, bronze, silver, gold or platinum plans), define their contribution toward their employees’ coverage, and then offer the employees choices of multiple insurers and plans. Employees choose among the plans that fit their needs and their budget. Employers can offer coverage from multiple insurers, just like larger companies, but get a single bill and make a single payment.
HHS is accepting public comment on the proposed rules over the next 75 days to learn from the public how the rules can be improved. Review the specific provisions of the HHS-proposed regulations,
Establishment of Exchanges and Qualified Health Plans.
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