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Cohen Lays Out Path for Standing Up Federal Exchange

By John Reichard, CQ HealthBeat Editor

February 14, 2013 -- The top federal official in charge of establishing health insurance marketplaces under the health care law recently detailed plans for a poorly understood but major part of that effort: the federally facilitated exchange.

It was long past time to do so, Sen. Orrin G. Hatch, R-Utah, indicated in his opening remarks at a Senate Finance Committee hearing on exchanges. "Many key details remain unanswered," Hatch complained in his opening statement at the hearing, which centered on testimony by Gary Cohen, head of the Centers for Consumer Information and Insurance Oversight at the Centers for Medicare and Medicaid Services (CMS).

These new marketplaces will enroll individuals and small businesses in insurance plans.

So far, the administration has only offered 19 pages of guidance, Hatch said. "Those 19 pages amount to little more than a statement of purpose from the administration and exactly what the states can expect remains largely unknown."

After Democrats aggressively peppered Cohen with questions about various aspects of the implementation of insurance options under the overhaul, he walked the committee through a number of details relating to the setting up of exchanges, many of them relating to the federal exchange. CMS is now calling the exchanges "marketplaces."

Cohen noted that the Web portal where people will go to sign up for coverage on the federal exchange will be at He said next month CMS would begin to get input on the federal exchange from consumers, providers and other stakeholders in each of the states in which it is expected to operate, which will be in those states that have not signed up for either their own exchange or a partnership model with the federal government. That's more than half of the states in the nation, Hatch reminded the audience. That input will give the agency a chance to address concerns about the federal marketplace in places most hostile to the health care law (PL 111-148, PL 111-152).

Cohen also went through other nitty-gritty aspects of the huge amount of work involved in getting the exchanges going.

On Jan. 28, CMS released a draft model application that individuals and small businesses will use to apply for health care coverage on the exchanges. The applications will be available in the spring after comments are gathered and final testing is conducted. The forms can also be used by states setting up their own exchanges and by their Medicaid and Children's Health Insurance Program (CHIP) agencies.

"This means that most individuals can use the same application, and provide information only once, no matter how the individual submits the application and regardless of which program receives the applications," Cohen said.

Nuts-and-Bolts Work Under Way

Cohen said testing has begun on a "federal data services hub" that will be linked to all exchanges. It will connect with the Department of Homeland Security, the Social Security Administration, and the IRS to verify citizenship and to determine any tax credits available to help buy coverage. Each of the agencies has signed agreements with the CMS to provide the needed data "in real time" starting in October, Cohen said. Testing of the movement of data among the agencies linked to the hub will be completed this spring, Cohen said.

He noted that it would be a pathway for information but would not store it. "We have completed the hub's technical design and have almost completed the services related to federal and state agency interactions,'' Cohen said. "We have completed a framework for security across agencies."

Tests will then be made with "states that are the furthest along with implementing their marketplaces," and CMS "will continue testing throughout the year. The hub will begin officially supporting the verification of applicant information on Oct. 1, when open enrollment begins.

"The hub will access only the information needed to determine individual eligibility and will not be involved in the selection or certification of health plans," Cohen added.

After consumers are verified by the hub as being eligible to shop on exchanges, they will be able to begin the process of searching for a plan. "We are well along in the process of making sure that [they] will find a variety of affordable, comprehensive, qualified health plans to choose from," Cohen said. "CMS is building a plan management infrastructure that will enable us to see, review and approve applications from issuers for plans to be sold in the federal marketplace."

CMS released a draft template last November that insurers will use to submit information on plans they intend to offer for sale. "Issuers will begin submitting applications to us at the end of March," Cohen said. "We will review those applications and will approve plans to be sold in the federal marketplace by the summer. Issuers will then have an opportunity to review and make any corrections in the information about the plan that will appear on the web site at the beginning of October."

Cohen said CMS will know by July what premiums plans will charge shoppers on the federal exchange.

The process of qualifying for and signing up for coverage will take as little as 30 minutes in some instances, Cohen said. But many people will need lots of personal help to navigate the process.

"Navigators," people and organizations that provide assistance, will play a "crucial" role in helping consumers use exchanges, Cohen said.

Consumer Help in Pipeline

"Our first funding opportunity for navigators will be going out shortly," he added. CMS will issue the first grants for the navigator program in June "and training for the navigator program is under development."

Cohen added that "we will soon be releasing additional guidance on the navigator program and other assistance programs that consumers will be able to access when shopping for coverage in the new marketplaces." Cohen said, "These programs will also provide help for Medicaid-eligible consumers by walking them through the Medicaid or CHIP enrollment process."

Also, "CMS will provide agents and brokers with a portal to the federal marketplace website,, if the agents and brokers meet the applicable standards required to assist consumers," Cohen said. Agents and brokers can use the portal to help consumers apply for federal subsidies and enroll in a plan.

CMS is creating a "consumer outreach and education plan rooted in consumer research, audience segmentation analysis and state government's knowledge about the best ways to reach their residents," Cohen said in his written testimony. "We are challenging the states that are running their own marketplaces and those that are working with the federal government to reach out to communities and consumers in innovative ways.

"A media campaign will be launched soon just to increase awareness of the law and what the benefits are and what it can do for them," he told the senators. "When I say media, I mean all forms of media, social media, traditional media. The purpose of that will be trying to drive people to, which really is the central source of information about the Affordable Care Act and the marketplaces in particular and will give people the information they will need to then come back in October when they can actually take action to get enrolled."

CMS is enlisting other federal agencies to help reach and assist potential enrollees. It has an inter-agency working group to develop plans to encourage enrollment and distribute information. To that end, "CMS is also working with private partners, including nonprofits, provider and trade associations, advocacy groups, corporations and businesses, and faith- and school-based groups."

Cohen's testimony, while detailed, did not acknowledge any real problems in the implementation effort or express doubt that it would occur on time.

Senators wondered whether the situation might be more worrisome.

Committee Chairman Max Baucus, D-Mont., asked whether CMS would keep information about implementation problems under wraps. Cohen said no. The chairman also wondered whether there had been any "uh-oh revelations so far." Cohen said no. Baucus was skeptical, noting a problem with "antiquated" computer systems at agencies in involved in the hub. Cohen replied that that's why federal officials are creating the hub.

Cohen was unable to answer how many navigators would be hired and trained to assist consumers. But Cohen said the goal is to have help available for all who need it.

Sen. Johnny Isakson, R-Ga., warned: "You better get it right the first time. If it crashes and burns on Oct. 1, you have a huge problem."

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