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 Oct. 1, 2013.
HHS will be able to operate a health insurance exchange in every state that is not able to operate an exchange in time for open enrollment, Cohen said.
"Ten months from today, people will be signing up for health insurance," Cohen said. "Many will have not had health insurance or will have had it and lost it."
The federal exchanges will charge plans a user fee of up to 3.5 percent of premiums on qualified health plans that are part of the federal exchange, and the state-based exchanges will find their own solutions for revenue, Cohen said.
HHS will also provide consumer support with a live chat system and a call center, and it is building a website so that consumers can compare plans and enroll in a qualified health plan, he said.
The Centers for Medicare & Medicaid Services (CMS) is building a data services hub, and it has completed the technical design for that project, Cohen said. The hub is now in the testing phase, Cohen added.
States will be the primary exchange regulator but the CMS is ready to take on enforcement, Cohen told state regulators.
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 program rules or does not, or if it asks HHS to help with enforcement, Cohen said.
Cohen spoke at the National Association of Insurance Commissioners fall meeting, before the NAIC Health Care Reform Regulatory Alternatives Working Group.
The working group is chaired by Pennsylvania Insurance Commissioner Michael Consedine. The members are states that, by and large, have not moved far with efforts to create state-based exchanges. The Patient Protection and Affordable Care Act (PPACA) -- the federal health care reform law -- requires regulators to give consumers access to a state or federally facilitated insurance marketplace for health care.
Cohen said much new guidance is expected in the next couple of weeks from HHS. Regulators expect rules on navigators to be out in January, he said.
Cohen also said there is a new grant deadline of Dec. 28 for states that 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 he assured state regulators they would still be the primary regulators of insurance.
If PPACA 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.
Cohen, who has been the deputy insurance commissioner and general counsel at the California Department of Insurance under John Garamendi and Steve Poizner, acknowledged that the PPACA exchange regulations are still coming into focus.
"Yes, we haven’t put out enough for you to know how this will work," Cohen said. "I was a state regulator. 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."
The job will be to implement the rules, 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 StateReforum.org, 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.