Department of Health and Human Services Releases New Operating Rules for State-Run Health Insurance Exchanges under the Patient Protection and Affordable Care Act

The Department of Health and Human Services has issued new rules that purportedly provide state officials with some flexibility despite the looming January 1, 2014, deadline to have state and/or regional health insurance exchanges under PPACA.
The U.S. Department of Health and Human Services has released broad new rules and regulations to provide state legislatures and agencies guidance on the establishment of the health insurance exchanges that form a significant part of the Obama administration's healthcare reform law, the Patient Protection and Affordable Care Act (PPACA), also known as Obamacare.

As reported by Reuters, the long-awaited rules are intended to provide state officials with flexibility as to federal deadlines as they undertake "the complex task of building state and regional insurance markets before a January 1, 2014, deadline."[1]
Starting Jan. 1, 2014, new health insurance markets called "exchanges" must be up and running in every state, the linchpin of a grand plan to make health insurance accessible and affordable to those who now struggle to find and keep coverage. Individual consumers and small businesses will be able to shop online for competitively priced coverage, and many will receive government subsidies to help pay premiums.[2]
Among the key elements of the new rules, according to the Associated Press:
  • States can receive conditional federal approval for their exchanges if their plans are far along but not final by Jan. 1, 2013. States can operate exchanges in partnership with other states. The federal government will provide funding for different types of exchanges to allow for flexibility.
  • The state exchanges themselves will determine the number and type of health plans offered to consumers, within broad standards set by the federal government. Plans will have to comply with marketing rules to ensure they are not trying to cherry-pick the healthiest customers in the state.
  • Consumers must be able to apply online for coverage in their state exchanges. To reduce paperwork, exchanges will rely on existing computer databases to verify basic personal information and eligibility. However, some key details, such as whether the consumer is a legal resident of the U.S., may have to be verified by the government. And the IRS will have final say on tax credits.
  • Exchanges must be able to pick from two federally approved methods for coordinating with the Medicaid program in their states.
  • Exchanges must be able to use intermediaries called "navigators" to help educate consumers and small businesses about how the new system works.
  • Exchanges must be financially self-sufficient by 2015, by charging fees to support their operations.[3]

UPDATE: While the rule is final, certain provisions are being issued as "interim final" such that those provisions are open to public comment for forty-five (45) days.

The full text of the rule, 45 CFR Parts 155, 156 and 157, is available here.

1New Healthcare Exchange Rules Issued for States, David Morgan, Reuters, March 13, 2012.
2Feds release health overhaul blueprint for U.S. states, The Associated Press,, March 13, 2012.
3Feds release health overhaul blueprint…, Id.


  1. Their health protection law should always include a competitive medical and dental health provision. My dentist in Omaha says that oral health shouldn't be taken for granted because we can't be completely healthy if we have bad dental health.

  2. They should've also put in policies to better guard against scams. The country loses millions every year to fraudulent claims alone.