NSBA Weighs in on Federal Health Exchanges

June 20, 2012

On June 18, NSBA filed its comments on the May 2012 guidance issued from the Department of Health and Human Services (HHS), “General Guidance on Federally-facilitated Exchanges” which outlines its approach to implementing a Federally-facilitated Exchange (FFE) in any state where a state-based Exchange is not operating.

In its comments, NSBA expressed support for state level health insurance exchanges (including Small Business Health Options Programs or SHOPs) as a reasonable step designed to improve the competitiveness of health insurance market, to increase the information available to health insurance purchasers (whether individual consumers or small businesses) and to constrain health insurance costs provided that participation in the exchange is voluntary.

NSBA also argued that small businesses should be provided the option to choose which plan or plans they will offer their employees. If they do not retain effective control over what insurance is offered, fewer small businesses will participate and the SHOPs are much less likely to succeed whether the SHOP is a federally facilitated SHOP, partnership SHOP or state SHOP. NSBA urged HHS to clarify that small-business participants in the SHOP will be able to choose what insurance is offered to their employees.

Insurance agents and brokers are very important to helping make exchanges a success. They will play a crucial role in educating their customers and constructively framing choices for small businesses. NSBA said that a vibrant and healthy role for them in the insurance marketplace should be retained.

NSBA supports allowing any QHP that meets all certification standards to sell insurance on the exchanges. The HHS guidelines commit to do this for only one year. A permanent unrestricted market is likely to induce more insurance companies to offer insurance in more markets at lower costs since they will be assured that they will be able to recover their start up costs (notably design, actuarial, legal, training and regulatory approval costs) over a longer period.

The guidance contemplates delegation of regulatory authority to various non-governmental actors including the National Committee for Quality Assurance (NCQA) and the Utilization Review Accreditation Commission (URAC). This raises questions regarding the governance, effective control and transparency of these accrediting agencies, and there has been little by way of justification of this delegation.

To read the HHS General Guidance on Federally-facilitated Exchanges, click here.

To read the NSBA comments, click here.