State governments that decide not to set up their own Patient Protection and Affordable Care Act (PPACA) exchanges have to decide just how much they want to cooperate, or not cooperative, with the "federally facilitated exchanges" (FFEs).
Martin Swanson and John Paul Sabby, policy specialists with the Nebraska Department of Insurance, talk about some of the choices facing non- "HIX" states in a presentation posted on the department website.
PPACA requires all states and the District of Columbia to have exchanges, or health insurance supermarkets, open for business Oct. 1.
In a state that decides not to set up its own exchange, the U.S. Department of Health and Human Services (HHS) is supposed to set up an FFE.
PPACA also sets many new standards for non-grandfathered plans that take effect on or after Jan. 1, 2014.
The drafters of PPACA have written the law in such a way that states can be tougher on insurers than PPACA requirers but usually cannot block implementation of a PPACA requirement, the Nebraska officials said.
The "assumption is that the state will enforce federal rules," the officials said.
If the HHS secretary determines that a "state has failed to substantially enforce" the PPACA provisions that affect health insurance issuers under its jurisdiction, then PPACA requires the HHS secretary to enforce the provisions in that state, the officials said.
The Center for Consumer Information and Insurance Oversight (CCIIO) told states in a letter sent in February that it believes that most states have the authority to enforce the federal rules, the officials said.
The officials said a state can choose to:
- Change state rules to meet minimum federal standards.
- Use general authority, such as rate review authority, to enforce federal rules.
- Have the state enforce state rules and have the CCIIO enforce federal rules.
- Keep authority for deciding whether companies are complying with the federal rules but let CCIIO assign the penalties.
In some cases, the Nebraska officials said, a state's laws and regulations could affect how much the state will cooperate with CCIIO and PPACA requirements.
Nebraska, for example, has a law that requires policies sold in the state to conform to both state and federal law, the officials said.
Even though Nebraska is not setting up an exchange, it will certify the insurers that want to sell "qualified health plans" (QHPs) through the Nebraska FFE, and it will enforce the PPACA health insurance standards rules, the officials said.