Tuesday Tidbits

Yesterday, the Department of Health and Human Services released proposed rules intended to create a flexible framework for state health insurance exchanges and the federal fall back exchange under the Affordable Care Act ("ACA"). The HHS press release is titled  "HHS and states move to establish Affordable Insurance Exchanges, give Americans the same insurance choices as members of Congress." While the FEHBlog believe that this title is an homage to the FEHB Program, the fact of the matter is that the ACA pushes members of Congress out of the FEHB Program and into the exchanges in 2014. (The President stays in the FEHB Program.)

The ACA requires that these exchanges offer health insurance options to members of Congress, other individuals, and businesses with less than 100 employees in 2014. Modern Healthcare reports that

Joel Ario, who serves as the director of the office of health insurance exchanges at the Office for Consumer Information and Insurance Oversight, said there are two main priorities this year for states to establish exchanges. The first is to adopt some form of governance structure, which he said 10 to 12 states have done already. "A second important step early on is the development of the IT infrastructure toward the exchanges," Ario said. "Thirty states have started that process and are moving forward at varying levels.

The AMA News reports on the annual AHIP Institute that recently was held in San Francisco. According to the article,

A few key elements of insurers' planning emerged at the meeting:

First, cutting overhead is critical. With medical spending minimums in place starting this year, health plans' profitability depends on efficiency. They are looking for ways to cut costs that do not affect medical spending. That's a reversal from decades of trying to minimize spending.

Second, individual customers are the new market, since individuals, not employers, will be doing more shopping for coverage in the future. Marketing to people who fit into thousands of niches is different from marketing to executives at large corporations. Some health plans are experienced at this but are used to spending lots of money in their individual markets. That budget will be constrained in this new era.

Third, health plans will share financial risk and use new technology with physicians in this post-reform world. Insurers want to identify which systems are going to work best and figure out how to get doctors and hospitals to practice in a way that saves everyone money.

In April 2011, the Labor Department held an open forum on implementation of the ACA provision requiring large employers (200 or more employees, including the federal government) to automatically enroll new employees in their health benefit program, subject to an opt-out right. This new rule which is an amendment to the Fair Labor Standards Act takes effect in 2014. Today, the Labor Department posted a transcript of the forum on its website. Although the FEHB Program was not discussed, the meeting substance was interesting and proves that nothing is simple.