Stakeholders React to Proposed HIX Rules

While the Department of Health and Human Services' proposed rules for the creation of health insurance exchanges presents a set of challenges to health insurers, the proposed regs are receiving mostly positive comments from stakeholders, including industry groups and consumer advocates.

The rules, proposed Monday, outline the requirements a state must meet to launch an exchange. And while few have had the chance to fully review the 200+ pages of rules, as might be expected, stakeholders have been able to quickly focus on the sections that apply to their interests.

At the announcement of the proposed rules Monday, HHS officials emphasized the flexibility that states will have in development of a HIX. Steve Larsen, director of the center for consumer information and insurance oversight at HHS, said that states may design "exchanges that work for them."

The industry group, America's Health Insurance Plans embraced the HHS decision to put states in the driver's seat in the development of HIX. "We agree that states are in the best position to establish exchanges because they have the experience and local-market knowledge to ensure exchanges meet the needs of consumers in their state," said Karen Ignagni, AHIP president and CEO in a statement.  She cautioned that as they develop exchanges, states should take care to "avoid duplicating existing state regulations that will add complexity and increase costs for consumers." 

Mike Russo, a policy analyst at U.S. PIRG, a consumer advocacy group, said in a statement that  "HHS released a menu, not a recipe" and he encouraged state leaders to "take the flexibility they've been given to design a strong, negotiating exchange on behalf of consumers. Consumers need this new exchange to lower costs and improve the quality of their coverage."

While also supportive of design flexibility, Stephen Finan, senior policy director of the American Cancer Society Cancer Action Network, noted in a statement that with flexibility "comes a responsibility for states to create exchanges that meet the wide-ranging needs of people with cancer and other life-threatening chronic diseases." He added that ACS-CAN hopes that the final rule "will include more specifics that define the minimum standard for an effective exchange."

The role HIX are expected to play in helping to reduce healthcare costs was noted by Terry Gardiner, vice president of policy & strategy for the Small Business Majority. "The most important component of healthcare reform for small businesses is the creation of state health insurance exchanges. They will lower the high cost of insurance premiums and reduce the administrative costs that are so often the driving force behind skyrocketing rates for small group plans, "Gardiner said in an email.

The governance of health insurance exchanges was on the mind of several groups. PIRG's Russo stated that HIX "must be run by and for businesses and consumers, not by and for the insurance lobby." He added that HIX need to have the "power to negotiate for lower premiums and push for reforms that improve the quality of care. As our exchange board members begin to set policies and build the exchange, they should focus on delivering results for consumers."

There was some disagreement concerning how health plans should be selected to participate in HIX. ACS-CAN's Finan said, "exchanges should be empowered to select which plans they offer and to limit exchange participation to high quality plans." AHIP, on the other hand, supports a wide panel of health plans in each exchange as long as the plans meet the standards set forth in the draft rules.

"All health plans offering coverage in the new exchanges will be required to meet new quality and performance standards. To enhance competition and preserve consumer choice, all health plans that meet these new standards should be allowed to offer coverage in the exchanges."

The inclusion in exchanges of health plans "currently serving low-income people in Medicaid and CHIP" is important to Margaret Murray, CEO of the Association for Community Affiliated Plans.

The National Community Pharmacists Association, which has an adversarial relationship with pharmacy benefit managers, is happy that the draft rule included language that affirmed the need for PBMs operating in the exchanges to confidentially disclose to the health plan and HHS any information regarding PBM practices. "The disclosure requirements should help health plans in the exchanges achieve a better bargain for patients as wasteful PBM practices are discouraged and more readily identified, " explained Douglas Hoey, RPh and executive vice president and CEO of NCPA.

Efforts to contact the National Governor's Association for a comment were unsuccessful. Nor did the National Association of Insurance Commissioners respond to request for comment. The AMA was preparing its statement on Tuesday afternoon.

Public comments will be accepted for 75 days. The final rules are expected later this year.

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