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January 2011 St@teside

Federal Update

OCIIO moves to CMS

In early January, HHS Secretary Kathleen Sebelius announced that the Office of Consumer Information and Insurance Oversight (OCIIO) would move in to the Centers for Medicare & Medicaid Services (CMS). According to Sebelius, this move will not only provide savings, it will also provide OCIIO with access to the best administrative resources and expertise for successful implementation of ACA. Additionally, OCIIO’s new placement should assist in coordination between Medicaid and insurance exchanges. It will now be regarded as the Center for Consumer Information and Insurance Oversight (CCIIO).

Update on MLR waivers
HHS Releases Medical Loss Ratio Regulations

On December 1, 2010, the Department of Health and Human Services (HHS) published in the federal register an interim final rule establishing new medical loss ratio (MLR) regulations.  On December 30, a new document was published correcting technical errors that appeared in the interim final rule.

The regulation allows for adjustments to the MLR standard to guard against market destabilization and establishes a process for states to request an adjustment to the MLR standard for up to three years, if it is determined that meeting the 80 percent MLR standard may destabilize the individual market and result in fewer choices for consumers. Other accommodations and adjustments included in the rule address the special circumstances of small plans, new plans, mini-med, and expatriate (covering U.S. citizens residing in foreign countries) plans.

While several states have indicated their interest in applying for the waivers, only Maine and New Hampshire have submitted their requests to CCIIO.

HHS Announces Exchange Establishment Grants

On January 20, HHS Secretary Sebelius announced the availability of new Exchange Establishment Grants to help support states in the implementation of health insurance exchanges. These grants have been designed to be as flexible as possible, recognizing that states are progressing at different rates. According to HHS, states that are moving ahead at a faster pace can apply for multi-year funding.  States that are making progress in establishing their exchanges through a step-by-step approach can apply for funding for each project year. States will be able to determine when to apply for grant funding as well as have multiple opportunities to apply for the funding.

Level One Establishment Grants:  These grants provide up to one year of funding to states that have made some progress under their exchange planning grant.  States may plan to reapply for a second year of funding under the level one establishment grants if necessary to meet the criteria to apply for level two establishment grants.

Level Two Establishment Grants:  This category of grants is designed to provide funding through December 31, 2014, to applicants that are further along in the establishment of an exchange.  In applying for level two establishment grants, states must meet specific eligibility criteria, including that the state has:

  • Legal authority to establish and operate an exchange that complies with federal requirements available at the time of the application;
  • A governance structure for the exchange;
  • A budget and initial plan for financial sustainability by 2015;                               
  • A plan outlining steps to prevent fraud, waste, and abuse; and
  • A plan describing how consumer assistance capacity in the state will be created, continued, and/or expanded, including provision for a call center.