By JoAnn Volk, Georgetown Health Policy Institute
Yesterday, HHS issued the first guidance on exchanges, the “first in a series of documents” they plan to publish over the next three years to give states the information they need to establish exchanges. Though the department plans to issue regulations for public comment in 2011, the goal of this week’s release is to give states early guidance in advance of their 2011 legislative sessions. States that were looking for definitive statements on a range of tough questions about how to set up an exchange won’t find them here – the Administration defers most of them. However, the guidance does send some interesting signals, highlighting areas where HHS will give states a lot of leeway, but making it clear where they can’t or won’t.
The guidance focuses on four main categories: principles and priorities; an outline of statutory requirements; clarifications and policy guidance; and federal support for the establishment of state-based exchanges. Seven principles and priorities will inform federal funding and technical support for state-based exchanges, allowing state flexibility on some areas while outlining statutory requirements all states must meet. Specifically, it lists as “state choices”: whether to form the exchange as a governmental agency or non-profit; whether to form regional exchanges or establish interstate coordination for certain functions; whether to limit the size of eligible employers to those with fewer than 50 employees; whether to require additional benefits in the exchange beyond the essential health benefits; whether to adopt an active purchaser model or use a more open, clearinghouse model; and whether to apply the same rules inside and outside the exchange.
At the same time, it makes clear that exchanges must serve consumers, citing statutory requirements for oversight of plans and making information available to consumers. And it suggests areas where HHS will be more prescriptive, i.e. risk adjustment, creating comparison shopping tools, and transparency. One of those “must do” items for states will be public data reporting to evaluate the exchange’s performance over time. The guidance notes that having these tools to measure the success of exchanges and identify best practices will be “critical” given the “diverse strategies” states can pursue on a number of issues. This requirement sparked an immediate rebuke from the Governor of Utah who noted that his state “would prefer something less burdensome.”
This guidance from HHS is just the beginning – there are a wide range of questions that states want HHS to answer, ranging from treatment of state benefit mandates to establishment of SHOP exchanges, to the development of network adequacy and marketing standards. HHS doesn’t seem ready to answer them all yet, but hopefully there will be additional guidance, because many states will need to start moving forward with enabling legislation before any final regulations come out.