HHS Explains Federal Partnership Model but Is Mum on Costs

By Steve Davis - May 23, 2012

Last week, HHS released some details outlining how it will operate a “federally facilitated exchange” (FFE) in cases where a state does not want to or is not able to operate its own exchange. It also published its Draft Blueprint for its partnership model, in which the feds operate the exchange, but the state takes responsibility for either plan management, consumer assistance or both. The feds, for example, might run the reinsurance and risk adjustment programs.

Given that the insurance exchanges must be ready for open enrollment in a little more than 16 months, some states might opt for some sort of federal partnership as a temporary fallback until they have all of the necessary pieces in place. But at least one state wants more information from HHS before it determines whether to operate an exchange on their own, partner with the feds or just let the feds run the whole thing.

In a conference call announcing the options, someone representing Indiana’s exchange efforts asked if there would be any ongoing costs (e.g., administrative or operational) for states that opted to have the feds run all aspects of the exchange or specific functions under a partnership model. Steve Larson, Steve Larsen, deputy administrator and director of CMS's Center for Consumer Information and Insurance Oversight, declined to comment. But without knowing the potential costs involved for various exchange models, it will be impossible for states to determine which path to take. For states, what do you see as the pros and cons in partnering with the feds or having the feds run the exchange entirely?