Proposed federal standards issued for implementing health care reform.
The Department of Health and Human Services (HHS) proposed two rules earlier this month that mark a milestone in the agency’s implementation of the Affordable Care Act. The proposals would guide states on how to structure their Affordable Insurance Exchanges (AIEs) —or what will become after 2014 the health insurance marketplaces where individuals and small businesses can choose among competitive plans.
In order to protect consumers, HHS has proposed minimum federal standards that states would have to meet to operate an AIE and that insurance providers would have to meet to participate in such an exchange. Notwithstanding the federal standards, states would have some flexibility in creating and managing their AIEs. For example, they would have the option to design an exchange individually or through a partnership with HHS.
HHS has also proposed standards for transitional reinsurance and risk corridor programs required during the first three years AIEs are in operation. The state-based reinsurance program would help stabilize health insurance premiums by subsidizing high-cost consumers. The federal risk corridor program would mitigate risk to insurers by capping issuer gains and losses for qualified health plans.
HHS is accepting comments on its proposed rules until September 28, 2011.