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States still unclear on health insurance exchanges

CRYSTAL CITY, Virginia (Reuters) - State health officials weighing the 2014 arrival of insurance exchanges heard little about the federally run option in a two-day meeting with U.S. health regulators.

States are facing three options in building the exchanges, a key aspect of President Barack Obama's healthcare overhaul passed last year: run one themselves, do it in a partnership with the federal government or let the Health and Human Services Department take over entirely.

"I haven't learned anything new about what the federal exchange would look like," said one state insurance official who attended the meeting that was closed to reporters.

Representatives from 46 states, the District of Columbia and two U.S. territories -- those that received federal grants to develop insurance exchanges -- gathered at a hotel here on Monday and Tuesday.

The exchanges are envisioned as open marketplaces where uninsured people and small businesses can band together to negotiate cheaper rates. With deadlines looming, there is concern about their smooth and timely roll-out, especially as many Republican governors seek to block implementation of the law supported largely by Democratic lawmakers.

According to slides posted online by the Centers for Medicare and Medicaid Services, which oversees progress on the exchanges, the federally-run exchanges will "look to state standards to harmonize rules inside and outside the exchanges" and could charge insurers user fees to run it.

It did became clear, three attendees said, that states partnering with the federal government would effectively give up authority over determining who is eligible to enroll in an exchange.

"That was an interesting thing to figure out, that wasn't something that a state could keep... at least initially," said April Todd-Malmlov, with Minnesota's Department of Health.

She said some states were concerned what that meant for their Medicaid programs for the poor, which have historically been managed at the state level.

Federal officials on Monday proposed more details on the partnership model, outlining some choices in what the federal government can do as a partner.

The partnership model, meant largely to help states transition into their own exchanges, offers three options. One lets states take the lead with participating insurance plans, another gives states the role of assisting consumers in understanding their options, and the third includes both.

(Reporting by Alina Selyukh; Editing by Tim Dobbyn)

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