Exchange deadline isn't 'all or nothing,' HHS official says

The Department of Health & Human Services (HHS) won't be taking an "all or nothing" approach to enforcing the health insurance exchange deadline, an agency official responsible for the establishment of exchanges said at a Health Affairs-sponsored meeting.

"We are encouraged, we are optimistic, we think the states are doing a great job," said Steve Larsen, deputy administrator and director of the Center for Consumer Information and Insurance Oversight. But he can't guarantee whether any given state would meet the deadline. "It's a little early at this point for us to say with respect to a particular state, 'That state is going to meet it,'" he added.

Although the proposed exchange rule set Jan. 1, 2013 as the deadline for HHS to certify whether states will be ready to operate their exchange by 2014, Larsen stressed it isn't an "all or nothing" decision, notes the Health Affairs blog. The rule introduced a hybrid option that would allow a state to perform some exchange functions, like certifying qualified health plans, while the federal government handles others, such as maintaining the single eligibility portal. "This allows states to continue to play an active role in the development of exchanges, even if they are not ready to take on 100 percent of exchange functions," Larsen said.

States also can establish their exchanges after the Jan. 1, 2014 deadline, with HHS running the exchange until the state was ready. However, Larsen noted, the state must have a transition plan between the federal and state exchanges.

Larsen also said that HHS decided to allow states to choose what type of exchange they establish, including "active purchasers" or "open market" approaches, because "state regulators and elected officials are closest to the circumstance in their states, to the appetite in their states for different models."

HHS must choose which type of fall-back exchange it will operate. Larsen said the agency will issue "further guidance in some form--it is not clear whether it would even have to be a regulation--that would clarify how we will be setting up an exchange or portion of an exchange," although he couldn't specify when that would happen, notes Health Affairs.

 To learn more:
- read the Health Affairs article
- watch the Larsen video remarks
- here's the health insurance exchange proposed rule (.pdf)

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