Health Insurance Exchange regulations are out, and they make me feel like a visitor from the future

Health Insurance Exchange regulations were released by HHS yesterday — in a DC hardware store, for local color and homespun truths — with a go-live date of January 1, 2014, per the Affordable Care Act, and a key interim approval deadline of January 1, 2013, by which date each state needs to demonstrate that it has its act together and is on a glide path to the go-live date.  Despite the rancorous opposition to the ACA (consider, for example, the views of the Virginia Attorney General — who is leading a multi-state charge against the individual mandate — expressed at the American Health Lawyers Association Annual Meeting last month, where he was an invited keynote speaker, and later tweeted a tone-deaf assessment of the audience and an unkind skewering of a questioner who didn't share his perspective), 49 states, D.C. and four territories have accepted health insurance exchange planning grants.  Thus, it seems unlikely (for now) that the federales will have to make use of the "Do I have to do everything for you?" clause which would allow HHS to step in and set up an exchange for a state.

Here in the People's Republic of Massachusetts, the health insurance exchange established by the Commonwealth's 2006 health reform law has been up and running for quite some time now.  As a Visitor from the Future I have to remember that the exchange — or as we call it here, the Health Connector, or just the Connector, does not exist in every state.  It is a boon to the people of Massachusetts, who have availed themselves of this tool, among others, in achieving near-universal coverage.  (I'd encourage you to check out the Connector website, and see how it works.)

Since passage of the ACA, folks 'round these parts (and in other states ahead of the curve) have wondered whether the federales would write rules that would require the early adopters to rip out what they've built and start over.  The issue has even risen to the level of a bill that would amend the ACA to let the early adopters alone.  (See discussion of Wyden-Brown bill.)  The regulations address this issue head-on, in a fairly reasonable manner.  Subject to certain exceptions,

a State operating an exchange is presumed to be in compliance with the standards set forth in this part if: (1) the exchange was operating before January 1, 2010; and (2) the State has insured a percentage of its population not less than the percentage of the population projected to be covered nationally after the implementation of the Affordable Care Act.

CMS Office of the Actuary says 93.6% of the population will be covered in 2016; CBO says 95%.  Comments are invited.  Massachusetts would meet either standard.  Such a "deemed" state is also supposed to "work with HHS to identify areas of noncompliance" with the exchange standards.  Unclear what we're supposed to do with this understanding of noncompliance.

Stepping back from the details, the naysayers will say that the state subsidies built into the exchange for eligible residents will break the camel's back — universal coverage is a pipe dream we can't afford.  The counter-argument, of course, is that we can't afford widespread uninsurance.  While the Massachusetts experience is not necessarily representatitive, so we can't extrapolate success from Massachsuetts to the US, there's much to be learned from the experience here as implementation of the ACA continues.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting