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7/12/2011
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HHS Proposes Health Insurance Exchange Rules

Federal guidelines assist states in building mandated competitive health insurance marketplaces.

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HHS secretary Kathleen Sebelius said the proposed rules are the latest steps toward implementing the Affordable Care Act to make the health insurance market work better for families and small business owners.

"We have a lot of hard work ahead of us, but are already making progress with states led by Democratic and Republican governors leading the way. Altogether, 49 states have accepted grants to help plan and operate their exchanges, and over half the states have passed legislation or taken administrative action to begin building exchanges. The draft guidelines we're releasing today help states build on that progress," Sebelius said.

The proposed rules further clarify the structure of state exchanges and give officials charged with establishing these exchanges greater leeway to develop their HIEs. These proposed rules include:

-- Each state can structure its exchange as a non-profit established by the state, as an independent public agency, or as part of an existing state agency. In addition, a state can choose to operate its exchange in partnership with other states through a regional exchange or it can operate subsidiary exchanges that cover the regions of the entire state. Any combination of these options can be approved as long as the exchange meets the guidelines laid out in the proposed rule.

-- HHS has identified several key functions that can be shared across state lines and set up a process to build those functions in a way that gives states the choice of working together to share resources and technology. Earlier this year, HHS awarded more than $200 million to a group of states to start developing HIE prototypes. The grantees offer a diversity that is valuable to all states as they work to set up their exchanges. The grantees represent different regions of the country, as well as different exchange governance structures and information systems. This diversity ensures that a wide range of IT models are developed, and that every state will benefit from these models.

-- To avoid duplication of effort and reduce the administrative burden on the states, HHS will partner with states to make exchange development and operations more efficient. This includes business functions like eligibility and enrollment systems, financial management, and health plan management. States can choose to develop an exchange in partnership with the federal government or develop these systems themselves. This provides states more flexibility to focus their resources on designing the right exchange for local insurance markets.

HHS said it is accepting public comment on the proposed rules over the next 75 days to learn from states, consumers, and other stakeholders how the rules can be improved. HHS will modify the proposal based on the feedback it receives. To facilitate that public comment process, HHS will convene a series of regional listening sessions and meetings.

InformationWeek Analytics is conducting a survey to determine what federal government IT organizations are doing to tackle diverse challenges and make tough decisions. Respond to the survey and be eligible to win an iPod Touch. Take the survey now. Survey ends July 15.

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