The administration has
gradually moved away from the ACA’s goal of encouraging Federally Facilitated Exchange (FFE) states to stand up
their own State-based Exchanges (SBEs). The ACA was written with state-based exchanges as the primary
model, and the federal platform was expected to be a temporary solution for most
states.

The agency, for example,
offers no new encouragement for a state to switch to a state-based model or to
preserve SBE status. The agency also proposes making it more expensive for SBEs
that want to shift some functions to the federal platform. Some industry
observers expect more SBEs will move to the FFE model entirely or move to a
partnership model.
State-based exchanges that
use the federal platform for some functions would be required to pay 3% of
premiums to cover a user fee beginning in 2017, under the CMS issued 400-page
Notice of Benefit and Payment Parameters (BPP). Most SBEs have user fees
that are lower than the 3.5% charged by HHS. To ease the transition, CMS’s
notice suggests the 3% fee might be phased with a 1.5% or 2% fee in 2017.
Among SBE states, the
reception to CMS’s proposed 3% fee for use of the federal platform has not been
favorable, and gradually increasing the percentage until it reaches 3% probably
won’t help make it more palatable, says Dan Schuyler, a senior director at Salt
Lake City-based consulting firm Leavitt Partners. Most SBEs looking to lease
federal technology were hoping for a price point of about 2% or 2.5%. He notes,
however, that for the fee, SBEs would have access to a package that includes
the call center, enrollment technology and eligibility. “CMS is trying to cover
its costs, and that’s the best price point, but that’s not enough of an
incentive for states to move to that platform.” The 3.5% user fee that carriers
must now pay to participate on the federal exchange is not enough to cover the
agency’s expenses and will likely increase at some point, he adds.
The authors of the ACA
didn’t envision that some SBEs would migrate to the federal platform and, as a
result, there is no structure to charge a fee for leasing the technology.
See CMS’s Draft 2017 Letter
to Issuers in the Federally Facilitated Marketplaces here. Mike Smith
President
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