Health Care Reform Today

• Kathy Vaccaro
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  Kathy Vaccaro

  

  Kathy Vaccaro

  Vice President, Health Care Reform Program Management Office

As part of the Patient Protection and Affordable Care Act, by January 2014 each state must open and operate a Health Benefit Exchange. By now, I am sure that you have heard of the discussion and debate around about these exchanges. After reading through this column, I hope you will have a better understanding of exchanges and their impact on employers, individuals, brokers and Cigna.

Initially, the exchanges will function as a new, one-stop-shopping health insurance marketplace where individuals and employers with fewer than 50 employees can look for, evaluate and purchase health insurance. In 2016, all states must move the small employer threshold to 100 employees, setting the stage for 2017, when states will have the option, with the approval of Health and Human Services (HHS), to open their exchanges to employers with more than 100 employees.

States have a wide variety of choice for the establishment, governance and operation of their exchanges. They can operate the exchange independently, partner with other states for a regional exchange, partner with the federal government, or allow the federal government to run their exchange.

The proposed regulations say the states can also seek "conditional approval" – indicating they are moving toward forming an exchange but need federal assistance until their exchange is completely operational. The first checkpoint for state exchange readiness is January 2013.

States can run their exchanges as not-for-profit organizations, or public or quasi-public agencies. And, they can choose to operate their exchange either more loosely, as an information clearinghouse that allows any willing carrier to participate or more tightly, as a market advisor that plays an active role in negotiating rates and benefits, as well as in selecting which carriers can participate in their exchange.

Any plan offered by an insurer or HMO through an exchange must meet the requirements of a Qualified Health Plan or QHP, for short. There will be five levels of benefit plans (catastrophic to platinum), each of which will provide essential health benefits and follow established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts). To participate on the exchange, QHPs will need to offer one gold plan, one silver plan and, with the recent regulations, a child-only plan.

While the final definition of networks will be left to the states, the regulations note that QHPs must offer adequate choice and include a sufficient number of essential community providers that provide care to predominantly low-income and medically underserved populations. HHS has asked for comments on how to define what’s “sufficient.” Cigna has suggested that sufficiency be determined taking into consideration cost, quality, access, the availability of essential community providers and practical provider contracting realities.

Also, we feel that to ensure quality and cost-effective care, it’s critical that carriers be allowed to maintain network standards and construct networks that meet the unique needs of their customer base.     

The proposed regulations also provide some clarity on the role of brokers in the exchange proposing that they also be allowed to operate as navigators, assisting individuals and small employers with their evaluation, selection and enrollment in health benefit plans. In addition, navigators could be Chambers of Commerce, Farm Bureaus or other entities. Cigna supports choice and diversity in the entities that advise customers on their insurance needs; and we believe it is critical that all navigators have similar licensing requirements to ensure that they are informed and educated as they assist with plan selections.

Right now, about half of the states appear to be well on their way to establishing an exchange. The states have a tremendous amount of work to do to meet the aggressive January 2013 deadline, so the federal government will step in and run the exchange – either in partnership with or on their behalf – for any state that has not met the deadline.

Impact on Cigna

Cigna expects to participate in several exchanges across the country.  We have been actively monitoring the evolution of the exchanges at both the state and federal level. We will continue working with regulators and legislators to ensure they have the necessary information to establish fair and balanced regulations that allow the exchanges to enhance the marketplace and promote competition and transparency, both on and off the health insurance exchanges.

More Information

To read more about exchanges, please see our advocacy paper, fact sheet and exchange principles. 

Kathy Vaccaro is Cigna’s Vice President, Health Care Reform Program Management Office.