HHS approves more state health insurance exchanges, releases guidance on partnership exchanges

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Health and Human Services (HHS) Secretary Kathleen Sebelius has announced new conditional approvals of several state health insurance exchanges. HHS also released additional guidance on states that opted to go with the partnership model for their exchange. California, Hawaii, Idaho, Nevada, New Mexico, Vermont and Utah are conditionally approved today to operate a State-based Exchange, and Arkansas is conditionally approved to operate a State Partnership Exchange.

States got an additional four weeks to make decisions and submit plans to the federal government about which model of health insurance exchange they will pursue. Under federal health care reform, states have three options for a health insurance exchange – fully federally managed, a partnership model which essentially splits management responsibilities and fully state run. No matter what option, a formal decision and basic plan has to be sent and approved by HHS.

HHS has to review all of these plans and get back to states within their own deadlines as well. Ultimately, all states will have some sort of exchange up and running by the end of this year, regardless of any subsequent extensions according to HHS.

Today’s conditional approvals follow those issued previously granted to Colorado, Connecticut, the District of Columbia, Kentucky, Massachusetts, Maryland, Minnesota, New York, Oregon, Rhode Island and Washington to operate State-based Exchanges and to Delaware to operate a State Partnership Exchange. To date, 20 states including DC have been conditionally approved to partially or fully run their marketplaces – with the remaining states having until February 15, 2013 to apply for a State Partnership Exchange.

The new guidance for partnership exchanges spans about 20 pages and gets deeper into the weeds on the trickiest of exchange options. According to the guidance document, “the State Partnership Exchange options provide states with a high level of participation in plan management and consumer assistance/outreach either on a permanent basis or as a stepping stone to a State-based Exchange in the future.”

This line is notable as states will still be able to opt into their own state-run exchange in the future, although they may not be able to do it with federal matching funds. The guidance also clears up more about HHS’ planned involvement in exchanges of all stripes as the original law didn’t account for this partnership model. The document includes guidance on federal support, transitions to a state based exchange, and what state’s need to to do get this type of model approved. HHS says that it will “work with states to agree upon processes that maximize the probability that HHS will accept state recommendations without the need for duplicative reviews from HHS.”