HHS Issues 2014 Rules for Health Plans, Exchanges

Regulation of the health insurance industry for 2014 became clearer yesterday, as the Obama Administration issued a raft of proposed rules that would bar discrimination against those with pre-existing conditions, incentivize wellness with rate reductions, and set standards for state insurance exchanges.

"The proposed rules and guidance we're releasing today would make it illegal for insurance companies to discriminate against the approximately 129 million Americans with pre-existing health conditions," Department of Health and Human Services Secretary Kathleen Sebelius said at the start of a news briefing yesterday.

"These rules will bring even greater scrutiny and transparency to proposed health insurance rate increases, and they'll help employers provide a healthier workplace. And we'll make it easier for consumers to compare health plans while ensuring that families and small business owners who buy their own coverage have access to basic essential benefits that are equivalent to what employers typically provide today," by basing requirements on "benchmark" plans in each state, she said.

Sebelius said the rules "answer many of the states' remaining questions, and will add guidance, as will additional guidance we issue in the days and weeks ahead" as the states decide on the three options for health insurance exchanges. They can create their own exchange, default to a federal exchange, or plan for a federal partnership. While about 18 states are committed to launching their own exchanges and six are planning for partnership, exchanges for 16 states apparently will be run by the federal government. About 11 states remain undecided.

Sebelius used the opportunity to counter arguments from opponents of the Patient Protection and Affordable Care Act, which requires that these rules be set. In the last three years, she said, electronic health record use has doubled, anti-fraud efforts have jumped to “record” levels, and there have been " dramatic cuts to red tape for hospitals."

And, she emphasized, "of all the worst predictions from the law's opponents—from accelerating cost to government getting between patients and their doctors to Medicare crumbling—none have come true. In fact, we've seen premium rate increases well below predicted levels, and some of the lowest increases in private sector spending in decades."

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