HHS Poses Slew Of Questions About Exchanges, Offers States $1M For Planning

HHS on Thursday took some of the first steps toward establishing the insurance exchanges created by health reform, offering states up to $1 million to begin planning for the new marketplaces and soliciting public comment on hundreds of questions about how the exchanges should function. The questions, which echo many of the issues raised last week at a meeting of state regulators, underscore the complexity of the decisions that states and HHS must make as the exchanges move forward.

States will need to decide, for example, whether to operate separate exchanges for the individual and small group markets, or combine the two into a single marketplace. And consumer advocates have noted that operating the exchanges will likely require extensive coordination with other state and federal health care programs, especially if a significant number of people fluctuate between Medicaid eligibility and the subsidies available to low-income people who buy insurance through an exchange.

Stakeholders at a National Association of Insurance Commissioners meeting last week debated, among other issues, the proper place within state governments to house the exchanges. The reform law directs HHS to create a fallback option for use in states that do not establish their own exchanges. It also sets certain minimum standards for participating in an exchange, but gives the states considerable flexibility to impose additional requirements and to decide how active they want their respective exchanges to be.

In addition to soliciting public comment about the exchanges, HHS announced the availability of $51 million in grants, $1 million for each state and Washington, DC. The money will help states with “research and planning” as they determine how to structure their respective exchanges, according to an HHS release.