HHS negotiating rates for federal exchange

The U.S. Department of Health & Human Services is stepping up its involvement in the rate-setting process for health plans sold on the federally-run health insurance exchanges.

HHS maintained that exchanges would operate as an open market system that grants access to all health plans applying to sell policies as long as they meet federal standards. And although HHS Secretary Kathleen Sebelius said the agency "isn't an active purchaser in the way that some states would regard it," HHS is examining certain elements of insurers' plans, including rates, benefits and provider networks, when they apply for the federal exchange, reported The Hill's Healthwatch.

"Negotiations are underway and we will be negotiating rates across the country," Sebelius said at a news briefing Monday, according to Kaiser Health News. "We intend to do rate negotiation and make sure that the plans are going to offer consumers the best possible choices, as opposed to the law in some states ... where a company comes in with the plan rates and you take what you get," she added.

For example, HHS is reaching out to insurers that submit outlying rates, whether exceptionally high or low, in their markets. Without actually disclosing competitors' rates, HHS is working with insurers to determine whether their rate submittals are correct.

Former HHS official Joel Ario, who is now managing director of consulting firm Manatt Health Solutions, said HHS's negotiations could benefit insurers. "In a marketplace where some insurers know they priced at the high end of their actuarial range, feedback from regulators that allows them to reconsider their pricing might be a welcome opportunity," he told KHN.

To learn more:
- read The Hill's Healthwatch article
- see the Kaiser Health News article

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