HHS releases new insurance exchange rules, includes controversial surcharges

Published on December 2, 2012 at 11:53 PM · No Comments

News outlets covered a new round of regulations released by the Obama administration Friday afternoon.

The Associated Press: Feds Propose Fee On Health Insurers In New Market
Health insurance companies will have to pay to play in new health insurance markets coming under President Barack Obama's health care law, the administration said in a regulatory notice issued Friday. The Health and Human Services department is proposing a "user fee" amounting to 3.5 percent of premiums for health insurers who want to offer policies in new federal exchanges coming in 2014. The fee is to cover administrative costs of the new markets, which were designed to be self-supporting (Alonso-Zaldivar, 11/30).

The Washington Post: Want To Sell Insurance On The Obamacare Exchanges? There's A (3.5%) Fee For That
Health and Human Services will operate a health insurance exchange in all states that decline to set up the marketplace themselves. In order to finance the exchange's operations, new draft regulations released Friday envision health plans paying a "user fee" if they want to sell in that space. The size of that fee would depend on the number of members a health plan had enrolled through the marketplace (Kliff, 11/30). 

Kaiser Health News: Insurance Surcharges Will Fund Most Online Exchanges Created Under Health Law
Concern over operating costs is one reason that fewer than 20 states have committed to building their own exchanges – far fewer than the law's backers had envisioned. Governors have until Dec. 14 to tell federal regulators whether they will set up a state exchange, and until Feb. 15 to decide whether to partner with them to do it. States that do nothing are required by law to have one run by the federal government (Galewitz, 12/1).

The Hill: HHS Sets New Fees For Insurers In Federal Exchange
It's hard to know yet how that [fee] translates into dollars, ... States that operate their exchanges will likely also charge a user fee for participating insurers. ... The size of the fee is just one calculation in a difficult balancing act for exchanges. The new marketplaces -; designed to function as a sort of Expedia for health insurance -; have to be useful enough to attract patients but also lenient enough that insurers will want to participate (Baker, 11/30).

Modern Healthcare: AHIP Sees Insurer Fee Boosting Coverage Costs
[H]ealth plans say any fee will result in higher health insurance costs. "It is important to keep in mind that any new fees to pay for the administration of exchanges will add to the cost of coverage, and that is why the focus needs to be on reducing administrative costs, streamlining operations and avoiding regulatory duplication that will add complexity and increase costs." Robert Zirkelbach, spokesman for America's Health Insurance Plans, said in an e-mail (Zigmond, 11/30).

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