After ACA ruling, HHS moves ahead with insurance exchanges

Washington The day after the U.S. Supreme Court’s decision to uphold the Affordable Care Act, the Dept. of Health and Human Services said it was forging ahead on one of the law’s key coverage provisions, the health insurance exchanges, by taking additional steps to get the marketplaces up and running in the states.

On June 29, HHS announced that it will provide states with 10 additional chances to apply for federal funding to establish state-based exchanges or state partnership exchanges with the federal government, or to prepare state systems for a federally run exchange as authorized by the health system reform law.

The grants “give states additional support to develop an exchange that works for their state,” Mike Hash, interim director of the Center for Consumer Information and Insurance Oversight with the Centers for Medicare & Medicaid Services, said during a June 29 teleconference.

Hash said the funding amounts awarded “will be a function of what the states actually propose.” States will submit plans on what they want to build and construct budgets based on the plans, he said.

Observers were expecting HHS to do something on this issue quickly after the Supreme Court ruling, said Jenna Stento, manager in the health reform practice at Washington consultant group Avalere Health LLC. A Nov. 16 deadline for states to submit proposals on exchange models “is quickly approaching, and states have a lot to do to get their blueprints prepared by that time,” she said.

To date, 34 states and the District of Columbia have received about $850 million in exchange establishment cooperative agreements to fund their progress toward building exchanges. Stento indicated that a good number of states will pursue the state-based exchanges. “Our latest count is roughly 16 states classify as high-activity,” meaning they’ve either enacted legislation or have passed executive orders to move forward with exchanges. “So I think we’ll see those states as well as a few others that are in pretty good shape for that deadline later this year.”

However, a handful of states “are too politically opposed to the law” to move forward with state-based or partnership-based models and will be required to accept the full federal model in the first few years starting in 2014, Stento said.

“We anticipate some variation from state to state, and that’s why we’ve encouraged our members to be active contributors to the discussion on exchanges in their state,” said Glen Stream, MD, president of the American Academy of Family Physicians.

Physicians should pay attention to what the benefit design is going to look like in the exchanges in their respective states and, more specifically, what the coverage for physician services is going to look like, Stento said. “We’ve received a little bit of guidance from HHS on the essential health benefits, but we are still expecting more details from the federal government on this issue, as well as the states,” as they think about selecting benchmark plans and putting some parameters on how they are going to implement those benefits, she said.

From a primary care standpoint, family physicians want to make sure that insurance plans offered in the exchanges cover services that provide good care for people, Dr. Stream said. “They’ve got to have prevention and wellness, a good primary care foundation. We’re particularly hoping that the plans include a payment model that supports a medical home transformation for the primary care practices.”