Mark Lutes, a Member of the Firm in the Health Care and Life Sciences practice, in the Washington, DC, office, was quoted in an article titled "Flexibility on Exchanges Is Good News for States, May Mean New Hurdles for Plans."
Following is an excerpt:
A 240-page proposed regulation issued by HHS would grant "substantial flexibility" to states as they develop a framework for their health insurance exchanges. But that flexibility — which will let exchanges determine whether some or all qualified insurers can participate — will create a new layer of regulation that could vary from state to state. The proposed regulation was published in the July 15 Federal Register.
The reg proposes giving states "relatively broad discretion" to exclude health insurers if their offerings aren't deemed to be in the public interest, says Mark Lutes. "This is a new paradigm for state regulation of health insurance which, to this point, sought to afford individuals and small businesses broad choice assuming that the carriers met basic solvency requirements and offered coverage that met basic benefit requirements."
States have until Jan. 1, 2013, to gain approval from HHS to move forward with their exchange. States that are close to hitting all of the required benchmarks in the "readiness review" can receive conditional approval from HHS, which is subject to additional assessments during the year. The federal government will operate the exchange if a state is unable to get one up and running on their own by the deadline. But those states will be allowed to take the reins back from the federal government in future years.
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