Will 2014 health insurance systems be fiscally sound?

The Center for Medicare and Medicaid Services (CMS) is seeking comments on its proposed rule on the Health Insurance Marketplace set forth by the Affordable Care Act.

HHS published the proposed rule on Monday, June 17, and comments must be received by July 17. “The release of these guidelines signals that we’re ready to build on our ongoing efforts and ensure that the new systems are fiscally sound,” CMS Administrator Marily Tavenner said in a written statement.

The proposed rule sets forth standards for the oversight of state marketplaces – or health insurance exchanges – through monitoring, reporting, and oversight of financial activities and Marketplace activities. “These mechanisms would assure that consumers are properly given their choices of coverage available, that consumers correctly receive advance payments of the premium tax credit or cost-sharing reductions if they quality…” CMS stated.

The proposed rule clarifies several details on health insurance marketplaces. First, CMS is proposing to clarify that the guaranteed availability and renewability requirements of group markets apply within the applicable market segment (individual, small group, or large group market). “We recognize that issues in the large group and small group markets may be subject to distinct requirements under the [Public Health Service] PHS Act…and that failing to segment the markets for purposes of guaranteed availability and guaranteed renewability would have consequences not contemplated by the PHS Act,” CMS wrote in the proposed rule.

CMS’s proposed clarifications would make clear that a health insurance issuer must offer to a large employer all products that are approved for sale in the large group market, but not those products approved for sale only in the small group market, and vice versa.

CMS is also proposing an accounting requirement for state-operated reinsurance and risk adjustment programs. “We also propose a provision restricting the use of reinsurance funds for administrative expenses,” CMS stated in the proposed rule.

Because open enrollment is only a few months away – October 2013, the Department of Health and Human Services will issue information on how consumers can enroll in the Marketplace. This summer, CMS will re-launch HealthCare.gov, where consumers will have access to real-time information and help to sign up for coverage during open enrollment in October.

Email comments on the regulation to http://www.regulations.gov or mail comments to: CMS, Department of Health and Human Services, Attn: CMS-9957-P, P.O. Box 810, Baltimore, MD 21244-8010.