HHS, States Move to Establish Affordable Insurance Exchanges

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The U.S. Department of Health and Human Services (HHS) yesterday proposed a framework to assist states in building Affordable Insurance Exchanges, state-based competitive marketplaces where individuals and small businesses will be able to purchase affordable private health insurance and have the same insurance choices as members of Congress. Starting in 2014, Exchanges will facilitate the process wherein individuals and small businesses can 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 (CHIP), and enroll in a health plan that meets their needs.

“Exchanges offer Americans competition, choice, and clout,” says HHS Secretary Kathleen Sebelius. “Insurance companies will compete for business on a transparent, level playing field, driving down costs. Exchanges will give individuals and small businesses the same purchasing power as big businesses and a choice of plans to fit their needs.”

HHS has proposed new rules offering states guidance on and options for structuring their Exchanges in two key areas. The first such area encompasses setting standards for establishing Exchanges, setting up a Small Business Health Options Program (SHOP), performing the basic functions of an Exchange, and certifying health plans for participation in the Exchange. The second area includes ensuring premium stability for plans and enrollees in the Exchange, especially in the early years as “new” consumers look to Exchanges to shop for health insurance. These proposed rules set minimum standards for Exchanges, give states the flexibility they need to design Exchanges that best fit their unique insurance markets, and are consistent with steps states have already taken to move forward with the Exchange model.

HHS has also announced that the federal government will partner with states to make Exchange development and operations more efficient. States can choose to develop an Exchange in partnership with the federal government or design these systems themselves.
For more information on Exchanges, including fact sheets, click here: http://www.healthcare.gov/exchanges.