An announcement earlier this month that the federal government will not establish a national health benefits standard to go along with requirements in the new health care reform law is already impacting some state insurance exchanges. Oregon exchange director Howard “Rocky” King, called the decision “a grenade.” The Obama administration is giving states broad latitude in deciding what benefits will be offered on their health insurance exchanges. A national standard of ‘essential benefits’ will not be established until 2016.
According to King, that decision will impact benefits offered on all types of insurance policies. By giving states more choices in terms of the benefits offered, they will be able to fully customize their insurance exchanges. However, the decision also adds additional requirements to an already short build out timeline.
In Oregon, a nine person public corporation will decide the benefits offered on the state’s exchange. The corporation will also be responsible for establishing a business plan and leading the development of the exchange. The corporation has indicated it will move forward on the business plan despite the lack of federal guidance on benefits offerings.
The state legislature is currently looking at legislation that would require insurers to rate their benefit plans according to a three tiered system – bronze for a minimum 60 percent of benefits, silver for 70 percent, gold for 80 percent and platinum for 90 percent. The legislation would require insurers to offer at least one silver and one gold plan.
Required types of insurance coverage vary widely from state to state. But there are some core benefits that are required throughout most of the country, observers predicted that these core benefits would drive the creation of a national standard but the administration has opted to give states more leeway as a way of dealing with objections from several states about the implementation of federal health care reform. The Supreme Court is expected to rule on court challenges from some of these states in mid-2012.
In Oregon, implementing a health insurance exchange is an issue that has been on the table even before federal requirements. The state is making big strides in getting more of its residents insured, including providing more options for lower income residents. The state accepted federal grants to support both the exchange and some of these new programs and intends to implement an exchange even if the Supreme Court overturns provisions in health care reform when it takes up the issue. King and other state health officials have noted that any ruling would more or less impact how the exchange and other programs are funded, not whether they would cease to exist.