Feds Outline Rules for States’ Insurance Exchanges

FRIDAY, Aug. 12 (HealthDay News) — The U.S. Department of Health and Human Services (HHS) and the U.S. Treasury Department today awarded $185 million to 13 states and the District of Columbia to speed up creation of Affordable Insurance Exchanges — a cornerstone of President Obama’s health care reform — across the country.

The agencies also proposed three rules for administering the plan, which will include tax relief to give families and small businesses “the same kind of insurance choices as members of Congress,” the HHS said in a news release Friday.

“Today, we’re laying the foundation to provide tax incentives to help working families purchase health insurance,” Treasury Secretary Tim Geithner said in the news release. “This new tax credit brings us a big step closer to achieving one of the signature goals of the Affordable Care Act — to provide tens of millions of Americans with access to affordable health insurance coverage.”

Already, more than half the states have begun establishing exchanges, the agencies said. The new grants will accelerate their development, and more funds will be awarded in coming months.

The Affordable Care Act of 2010 requires states to have the exchanges — essentially one-stop insurance shopping sites for consumers and small businesses — in place by 2014. The HHS sent letters to governors Friday outlining procedures and resources for pushing the project along.

Treasury and HHS said the three proposed rules for administering the plan call for:

• Easy Access to Coverage for Consumers and Small Businesses: Tax credits and cost-sharing reductions should simplify consumers’ enrollment in high-quality health plans. Small employers who take advantage of the Small Business Health Options Program will receive tax credits, enabling them to offer their employees a choice of health plans.
• Health Insurance Premium Tax Credit: Tax credits for single people and families will help millions of middle-class Americans gain access to health insurance coverage.
• Medicaid Eligibility: To reduce the administrative burden on states and make enrollment “seamless” for those who qualify, eligibility will be coordinated with Medicaid and the Children’s Health Insurance Program.

“Too many American families have been priced out or locked out of the health insurance market. Exchanges will give them control and could save them thousands of dollars a year,” said HHS Secretary Kathleen Sebelius. “I am encouraged by the progress states have made to date and am excited to give them more resources to continue their work.”

Some health-policy experts argued that the plan is unwieldy and costly.

“HHS keeps dipping into its ObamaCare slush funds even as states are sending the money back . . . and continues to claim that ObamaCare will save money, when every non-partisan expert attests that its taxes and mandates are already increasing premiums and will reduce jobs,” said Michael F. Cannon, director of health policy studies at the Cato Institute in Washington, D.C., a free-market/libertarian think tank.

“Have they learned nothing from the recession or the debt crisis?” added Cannon, who said that the “‘streamlined’ ObamaCare rules . . . run more than 1,000 pages” in length.

More information

To learn about women and the Affordable Care Act, visit the U.S. Department of Health and Human Services.

– Margaret Steele

SOURCES: Michael F. Cannon, director, health policy studies, Cato Institute, Washington, D.C.; U.S. Department of Health and Human Services, news release, Aug. 12, 2011

Last Updated: Aug. 12, 2011