“WASHINGTON — The Obama administration is about to carry out a major provision of the new health care law by issuing standards for health insurance exchanges, the markets where consumers and small businesses will be able to buy coverage from competing private plans.
To encourage states to set up the exchanges, federal officials said, they will give state officials broad discretion to decide the operational details. However, the federal officials made clear that they would set up and operate an exchange in any state that refused to do so.
Federal officials said the rules showed how President Obama was moving to expand insurance coverage, even as critics attacked the health care law in Congress, in court and in campaigns for the White House and Congress.
The rules, to be issued within days, were described by two officials: Kathleen Sebelius, the secretary of health and human services, who testified at a Senate hearing on Wednesday, and Timothy B. Hill, a senior official at the department, who provided additional details on Thursday at a conference of America’s Health Insurance Plans, a trade group.
Ms. Sebelius said the exchanges would provide one-stop shopping, allowing Americans to compare the prices and benefits of health plans. Insurers will compete for business, she said, and the increased competition will drive down costs.
In view of regional differences in health care markets, Mr. Hill said, “we want to give states as much flexibility as possible to choose what works for them.”
“We want states to be successful in establishing their own exchanges,” Mr. Hill said. “We are doing everything we can to help states get ready. But we are not naive. There is a likelihood that some states won’t be ready.”
Under the rules, each exchange will certify health insurance plans, operate a Web site comparing costs and benefits, and help consumers enroll. In addition, the exchange will determine who is eligible for federal subsidies, available to people with annual incomes up to four times the poverty level (up to $92,000 for a family of four).
Federal officials pointed to these examples of flexibility in the rules:
- A state can choose to run an exchange through an existing state agency or through a nonprofit entity established by the state.
- A state can open its exchange to all insurers and health plans, or it can limit the number of health plans available to consumers through the exchange.
- States can decide what role agents and brokers should have in selling insurance through an exchange. Officials assume that agents will play a significant role.
- States can allow larger employers to participate. In 2014 and 2015, each exchange will be open to companies with either 1 to 50 or 1 to 100 employees. In 2016, all exchanges will be open to businesses with 1 to 100 workers. Starting in 2017, states can let in companies with more than 100 employees.
If an employer seeks coverage through an exchange, it can designate one health plan for its employees or it can offer them a choice of two or more plans.
Some states, like California, Connecticut and Washington, are racing to set up exchanges. Some, like Florida and Texas, have expressed little interest.
The variation was illustrated by events on opposite sides of the country this week. In Oregon, Gov. John Kitzhaber signed a bill, passed with bipartisan support, specifying how the state’s insurance exchange will work.
“The exchange will contribute to the success of our larger health care reform effort,” said Mr. Kitzhaber, a Democrat.
But the New Hampshire House of Representatives passed a bill that prohibits state and local officials from planning or creating a state insurance exchange. The bill goes now to the State Senate, where some Republicans have expressed support.
State Representative Andrew J. Manuse, a Republican, said the bill was “part of a national effort to amend, repeal or replace the federal health care law.””