CCIIO head: federal health care exchanges to be ready to enroll on time

By National Underwriter

National Underwriter

By Elizabeth Festa with Allison Bell

National Harbor, Md.-- Gary Cohen, director of the Center for Consumer Information and Insurance Oversight (CCIIO) told a panel of state insurance regulators that the U.S. Department of Health and Human Services (HHS) "will be able to open our doors" on October 1, 2013, and be able to operate a health insurance exchange, in every state that is not able to operate an exchange in time for open enrollment.

"Ten months from today, people will be signing up for health insurance. Many will have not had health insurance or will have had it and lost it," Cohen said.

Cohen also said the federal exchanges would charge a user fee of up to 3.5 percent of premiums on qualified health plans that are part of the federal exchange, noting that state-based exchanges could find their own solutions for revenue. HHS will also provide consumer support – with a live chat, a call center and is building a website so consumers can compare plans and enroll in a qualified health plan, he said. The fee would be charged to the plan, an official from The Centers for Medicare & Medicaid (CMS) explained afterward. It could trickle down to the consumer, she said.

The CMS is also building a data services hub and has completed the technical design. The hub is now in the testing phase, Cohen noted.

The federal government is ready to take on enforcement of health insurance activities within the health care exchange if a state is unable to enforce, does not, or if it notifies HHS and asks it to help with enforcement. States will be the primary regulator but the CMS is ready to take on enforcement, Cohen told state regulators.

Cohen spoke at the NAIC National Meeting December 1 before the NAIC Health Care Reform Regulatory Alternatives Working Group chaired by Pennsylvania Insurance Commissioner Michael Consedine, with membership composed of states that by and large have not worked heavily in creating state-based exchanges, waiting for more clarity from the recently-concluded presidential election and more definitive rules from HHS. The working group is designed to be helpful to states as they go through a gamut of decisions and figure out how to work on or with health care exchanges.

The exchanges are mandated under the health care reform law and create state or federally facilitated insurance marketplace for health care.

Cohen also said much new guidance is expected in the next couple of weeks from HHS, and regulators expect rules on navigators to be out in January. Cohen also said there is a new grant deadline of December 28 for those who envision a state exchange or even a federally facilitated exchange that would transition into a state exchange.

He noted that former Oregon insurance commissioner Teresa Miller, acting director, Office of Oversight for CMS, has been doing outreach on this element with states, but assured state regulators they would still be the primary regulators of insurance.

If the Patient Protection and Affordable Care Act (PPACA) law takes effect on schedule and works as drafters expect, it will require insurers to sell coverage on a guaranteed-issue basis starting in 2014. Insurers will have only a limited ability to take a consumer's age or health into account when setting rates.
Regulators, agents and consumer advocates were concerned that navigators could assume some agent licensing functions and that is not envisioned by state law. Insurance agents are worried consumer advocates will press navigators into an expanded role.

New Hampshire Insurance Commissioner Roger Sevigny told Cohen that HHS had not spelled out whether navigators could cross line into licensed activities. Cohen said he doesn’t have the answers yet but noted that navigators are required by statute, and there would be rules out on their scope.

Wisconsin Insurance Commissioner Ted Nickel told Cohen that the state needs guidance on navigators as quickly as possible. Cohen agreed and said he was going back to HHS to talk to folk there Monday morning. Wisconsin is having the federal government come in and build an exchange and just wants to know how to regulate its various aspects and prepare.

"Yes, we haven’t put out enough for you to know how this will work," Cohen said.

"I was a state regulator. (California Deputy Commissioner and General Counsel California Department of Insurance under commissioners John Garamendi and Steve Poizner.) I am acutely aware there is a state side to this. My firm belief is that the questions will be answered, the policy will be clear, everyone will know what the rules of the road are," and the job will be to implement them, Cohen said.

Originally, HHS had asked states that want to build their own exchanges to submit a detailed exchange construction "blueprint" by November 16.

Now, HHS Secretary Kathleen Sebelius has written to governors to tell them that all they have to submit by Friday is a "declaration letter" indicating the state is interested in helping to establish its own "state-based exchange" program, according to a copy of the letter posted by, an affiliate of the National Academy for State Health Policy.

A state can take until December 14 to submit its exchange blueprint, Sebelius said.

A state that wants to work with HHS to develop a "state partnership exchange" -- an exchange set up in such a way that a state handles some tasks and HHS handles others -- can submit declaration letters and blueprint applications on a rolling basis up until Feb. 15, 2013, Sebelius said.

Individual consumers and small employers are supposed to be able to use new tax subsidies to buy plans that sell a standardized "essential health benefits" (EHB) package through new PPACA exchanges.

A "qualified health plan" (QHP) that sells coverage through an exchange can offer up to four "metal levels" of coverage, ranging from a bronze-level plan, which would cover 60 percent of the actuarial value of the EHB package, to a platinum-level plan, which would cover 90 percent of the actuarial value of the EHB package.

Individuals are supposed to be able to get "advanced payments" of the new premium tax credits while a calendar year is still in progress, long before they file their income tax forms for that year, so that they can use the "refundable credit" cash to pay for health coverage.

At least in the beginning, only employers with fewer than 50 full-time equivalent (FTE) employees will be able to use SHOP exchanges.

Originally published on