The final rules for the state-based health insurance marketplaces or exchanges, were announced March 12, 2012.  The exchanges are part of the health care reform law.  The rules allow the states great flexibility with which to design their exchanges. 

Some states are well along in their process of designing the exchanges, while others are taking a wait and see attitude as elements of the health care reform law go before the Supreme Court in the coming months.

One of the key rules set forth requires that the exchanges have at least one voting consumer representative.  Consumer advocacy groups wanted more, but this at least guarantees a voice in the process for consumers, if not exactly as loud a voice as the advocacy groups wanted.

The exchanges are designed to be “one-stop shops” for individuals and small businesses looking to purchase health insurance.  They will also help determine individuals’ eligibility for Medicaid and federal subsidies to help them purchase insurance.  The Congressional Budget Office estimates that over 20 million people will purchase health insurance through the exchanges by 2016.

Obama administration officials said the new rules differ from the old ones in several key ways.  Previous rules required the exchanges to determine if an applicant was eligible for subsidies.  The new rule allows the states to pass this decision onto the Department of Health and Human Services to determine eligibility.  States can also determine eligibility for Medicaid and the Children’s Health Insurance Plan by choosing their own Medicaid agencies.

States also cannot allow insurance agencies to determine an applicant’s eligibility for subsidies or Medicare, which are government functions.  But agents can assist applicants in filtering their health plan options.

Karen Ignagni, president and chief executive of America’s Health Insurance Plans, a trade group, said her organization would be reviewing the rules and offering feedback.
“Exchanges will work best if they are true marketplaces that maximize choice and competition so that individuals, families, and small businesses can purchase plans that are right for them,” she said in a prepared statement. “Consumers will be best served if a state exchange adopts an efficient, cost-effective approach that leverages existing health-plan resources, utilizes federal resources or guidance where sensible, and relies on the exchange itself to administer key functions.”

The exchanges are to take effect January 1, 2014 and can start accepting applications on October 1, 2013.  States must have approval from the Department of Health and Human Services for their plans by January 1, 2013.  Because some states will not meet this deadline, conditional approval can be give by the HHS, if it looks like the exchange will be operational by October 2013.