Health insurance exchange final rule: Insurers must justify rates

The U.S. Department of Health & Human Services is giving states "substantial flexibility" to operate health insurance exchanges (HIX), including certifying and comparing qualified health plans, as well as choosing between "active purchaser" or "any willing insurer" exchange model, according to an interim final rule released Monday.

But, like the proposed HIX rule issued last year, insurers still will have a fair amount of influence in how exchanges are governed because HHS is allowing them to work with states to define "qualified health plan" choices, reported LifeHealthPro. "This could mean that the Exchange allows any health plan meeting the standards to participate or that the Exchange creates a competitive process for health plans to gain access to customers on the Exchange," HHS said in the rule.

Insurers, along with other industry representatives, also can fill as many as half of the exchange governing board seats under the final rule. HHS only afforded consumer advocates one seat on the boards, however, Kaiser Health News reported.

The final rule does, however, direct exchanges to implement some strict standards on insurers, such as requiring the qualified health plans to justify their proposed rate increases and, if they choose to, more closely scrutinize these rate increase justifications, according to the Health Affairs blog.

Qualified health plans' networks also must include an adequate amount and type of providers, including mental health, substance abuse services and essential community providers. And the plans can't market or design their benefits to discourage very sick people from enrolling.

The final rule also implements the health reform law's 90-day grace period in which health plans can't drop members receiving premium tax credits when they don't pay their premium portion. Qualified health plans now are required to cover the first month of nonpayment for these members but can "pend" payments thereafter, Health Affairs blog's Timothy Jost wrote.

The qualified health plans, instead of consumers, also will face user fees for participating in the exchanges, LifeHealthPro noted.

Exchanges can begin accepting applications in Oct. 1, 2013, with policies taking effect Jan. 1, 2014, noted Kaiser Health News.

To learn more:
- read the HHS interim final HIX rule
- read the LifeHealthPro article
- see the Kaiser Health News article
- read the Health Affairs blog