Health Exchange Rule – What’s Vital To Success?

Health exchanges — online marketplaces often compared to sites like Expedia or Travelocity because they’ll give consumers a range of health insurance options — are vital to the success of the federal health law. So policy experts and industry officials are eagerly awaiting a proposed federal rule, due out any day, on how the exchanges will work.

In the meantime, in anticipation of the rule from the Department of Health and Human Services, buzzwords are flying: federal fall-backs, plan certification, measureable milestones and state flexibility. We asked several health policy experts what they will be looking for in the proposed regulation. Here are their edited responses.

Edmund Haislmaier, Heritage Foundation senior research fellow:

Governors and state legislators are looking for clarity on exactly what is expected of them before deciding if, or how, they will proceed.  So, I am looking to see how the regulations answer the question that state lawmakers – both Republicans and Democrats — keep asking me: “What exactly do we have to do by January 1, 2013?” State lawmakers don’t want to put a lot of effort into this without certainty that HHS will approve what they produce. They are looking for more of a check-the-boxes kind of thing — a sense that, if they meet certain objective criteria, they’ll get approval. Conversely, HHS needs state help if they are to have any hope of making the implementation work.  But to get states off of their default setting, HHS will have to offer them both significant flexibility and certainty.  Given the requirements and constraints of the statute, producing regulations that satisfy state lawmakers will be tough.

Alan Weil, executive director of the National Academy for State Health Policy:

The most important test of the health exchange rules is whether it gives states the confidence that they can proceed with their own vision of an exchange given the highly divergent political perspectives that exist around the country. The law is already quite specific regarding what exchanges must do.  I hope the rule primarily clarifies the ambiguities in the law rather than extends those provisions in ways that constrain state choices. Regardless of one’s views of the Affordable Care Act, it is certainly better if the vast majority of states run their own exchanges, and the rule will be a critical step in determining whether or not that will happen.

Sabrina Corlette, research professor, Georgetown University Health Policy Institute:

I’d like to see a clear statement that states can’t require exchanges to take “any willing plan” and be certified compliant.  The statute is clear that exchanges must have the discretion to determine whether a plan’s participation is “in the interests of” consumers and small businesses. This is fundamental to the purpose of an exchange – the ability to use judgment to achieve goals and reward those plans that do the best job of serving consumers and delivering high quality, efficient care.

Alain Enthoven, professor emeritus, Standford University Center for Health Policy/Center for Primary Care and Outcomes Research:

There is a lot that exchanges can do in the line of making the marketplace work better. The rule should focus on that. Some people want exchanges to negotiate prices. I think that’s a bad idea. Competition is a much better approach. Too many good things can be accomplished by the exchanges without getting them involved in being a price-regulating agency.

Paul Fronstin, director of the Employee Benefit Research Institute’s Health Research and Education Program:

One of the most important questions relates to choice.  When it comes to small employers going onto the exchange — will they be picking the health plan from the exchange on behalf of their employees, or will the employees get to choose from all of the health plans offered on the exchange?  I see the intent of the exchange as trying to provide something similar to the Federal Employees Health Benefits Plan.  In the FEHBP, federal workers choose the plan that’s best for them.  They have a lot of choice.  The small business will have a lot of choices, but will the workers be able to choose?

John McDonough, professor of public health practice and director of the Center for Public Health Leadership, Harvard School of Public Health:

An effective exchange is relentlessly committed to enabling and assisting consumers to navigate affordable and quality health insurance options, and every other interest must be secondary.  Amidst all the policy details and nuances, it’s the big picture that counts the most — and putting consumers in the center is the big picture.