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SALT LAKE CITY -- As part of the new health care law passed by Congress last year, the Department of Health and Human Services Monday released new standards for insurance marketplaces, which would allow individuals and small businesses to shop for health insurance.
According to the HHS, the regulatory framework -- exchange -- will "make it easier for individuals and small businesses to compare health plans, get answers to questions, find out if they are eligible for tax credits for private insurance or health programs like the Children's Health Insurance Program, and enroll in a health plan that meets their needs."
The new standards are set to take effect by 2014, opening up an exchange system for every state to tap into, with federal officials assessing a state's "operational readiness" by Jan. 1, 2013. Even if a state is not fully operational or unwilling to do so, individuals and small businesses will still be able to use the exchange.
"Exchanges offer Americans competition, choice, and clout," said HHS Secretary Kathleen Sebelius. "Insurance companies will compete for business on a transparent, level playing field, driving down costs; and Exchanges will give individuals and small businesses the same purchasing power as big businesses and a choice of plans to fit their needs."
Exchanges offer Americans competition, choice, and clout.
Although the Affordable Care Act has been challenged by more than two dozen states as to its constitutionality, both Republicans and Democrats support exchanges and their ability to provide individuals and small businesses with increased buying power. However, neither party is able to come to an agreement as to how a national exchange is to be organized.
"States are leading the way in implementing health reform, and (a national exchange) 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. "This regulation allows us to meet states where they are."
Secretary Sebelius said once the new health care reforms were fully implemented, the exchange system would make buying health insurance similar to buying home appliances or an airlines ticket.
Additionally, the HHS said an exchange will help families determine whether they're eligible for Medicaid, Children's Health Insurance Program or federal subsidies offered as a tax credit during the purchase of private insurance.
According to recent Congressional Budget Office predictions, by 2019, about 24 million people will have insurance through exchanges, with nearly 80 percent of them receiving federal subsidies.
However, Sen. Orrin Hatch, Ranking Member of the Senate Finance Committee, criticized the Obama administration for creating onerous requirements for each state to meet.
"As we continue to closely examine this proposed regulation, one thing is clear -- despite all the rhetoric about state flexibility, the Obama Administration is once again pushing for a Washington-dictated approach," Hatch said. "A 350 page regulation that uses 580 ‘musts' and 811 ‘requires' is not exactly a paragon for promoting state flexibility."
- Look for and compare private health plans
- Get answers to questions about your health coverage options
- Find out if you're eligible for health programs or tax credits that make coverage more affordable
- Enroll in a health plan that meets your needs
What this means for you:
- For individuals and families, the Exchange is a single place where you can enroll in private or public health insurance coverage.
- For small employers, the Exchange is a way to level the playing field, where you have better choice of plans and insurers at a lower cost, the way larger employers do now.
Hatch praised Utah for its successful exchange, which was tailored to meet the needs of the state. But with the new regulations, he said even Utah would struggle to meet the requirements.
"Utah has a successful exchange … however, it is likely that it would not be considered compliant with the onerous and costly requirements of this regulation as written. Failure to meet the long list of federal requirements in establishing an exchange would allow the Secretary of Health and Human Services to set up a federal exchange in the state," he said. "This regulation is another example of how the Administration is not serious about providing state flexibility or reducing health care coasts for American families."
Hatch added: "I have always said that Washington should allow states to be 50 laboratories of innovation to provide the solutions that meet the unique needs of their constituents. This is yet another ‘one-size-fits-all' approach to healthcare that American people have overwhelmingly rejected."
Nevertheless, the HHS contends that an exchange will be the most beneficial to individuals, families and small businesses seeking competitive health insurance plans, citing President Obama's previous statements concerning the need for health care reform and an open market system, saying:
"A market where Americans can one-stop shop for a health care plan, compare benefits and prices, and choose the plan that's best for them, in the same way that Members of Congress and their families can," he said. "None of these plans should deny coverage on the basis of a preexisting condition, and all of these plans should include an affordable basic benefits package that includes prevention, and protection against catastrophic costs."
The HHS is expected to offer more information on the exchange, clarifying "essential health benefits" covered in health plans at a later date.
For more information about the new regulations, visit www.healthcare.gov.