September 14, 2010—The federal health care reform provision requiring states to create health insurance exchanges for low-income Americans and small businesses could broaden the reach of the 340B drug discount program significantly.
A key element of the Affordable Care Act (ACA), the exchanges will be regulated markets for the purchase of affordable private health insurance. Individuals and businesses will be placed in pools to enhance their buying power, subsidies will be available for those below certain income levels and plans will have to meet minimum standards on matters including essential benefits, enrollment, consumer assistance, cost reporting, and quality ratings for participating health plans.
Each state can create its own exchange or partner with others in regional exchanges. The U.S. Department of Health and Human Services (HHS) will establish exchanges on behalf of states that choose not to create their own. The new markets, which will open in 2014, are expected to create millions of new potential customers for the insurance industry.
Language in the ACA requires private health insurance plans that participate in the exchanges to contract with all 340B-eligible hospitals, health centers and other covered entities. Currently, each 340B provider negotiates its own 340B reimbursement with third-party payers. This requirement could give those providers additional leverage to negotiate better contract terms.
In late July, HHS announced the availability of up to $1 million in grants per state to help them with initial planning for the exchanges. The applications were due Sept 7. HHS also requested public comment on the development of operating rules for the exchanges. It said it is especially interested in receiving comments on the standards health plans should meet to be certified to participate. Those submissions are due by Oct. 4.
In late August, California lawmakers sent a pair of bills to Gov. Arnold Schwarzenegger that would establish an exchange and its oversight board. If he signs them as expected, California would join Massachusetts and Utah, which already have exchanges up and running.