Many States Say 'No' to Health Insurance Exchanges12/18/12
TUESDAY, Dec. 18 (HealthDay News) -- Half of the states in the
nation have rebuffed a key provision of the Obama administration's
health reform law: the creation of state-based health insurance
exchanges, according to data compiled by the Henry J. Kaiser Family
States had until Friday, Dec. 14, to submit blueprints for
creating their state-based insurance exchanges.
By default, the federal government will implement health
insurance exchanges in the 25 states that are not moving forward,
helping the uninsured gain coverage. Another seven states,
according to the Kaiser Foundation's count, will operate exchanges
in federal-state partnerships. These arrangements will allow states
to share the administrative burden of exchange implementation with
the federal government.
"I'm sure it's a disappointment because the overall hope and plan from the beginning was to have as many states as possible to go ahead and implement their own exchanges," said Frank McArdle, an independent health policy and benefits consultant in Bethesda, Md.
On Monday, U.S. Health and Human Services Secretary Kathleen
Sebelius said in a blog posting that the federal government had
received 10 state applications to run an exchange. Last week, the
federal government granted conditional approval of insurance
exchanges in another eight states and the District of Columbia,
where significant progress has been made in setting up those health
insurance marketplaces. In all, 18 states and the District of
Columbia intend to run their own exchanges.
"We're looking forward to Jan. 1, 2014, when consumers and small businesses will be enrolled through the exchanges in private health insurance plans and millions more Americans will have the coverage they need and deserve," Sebelius wrote.
State-based health insurance exchanges are a key element of the
Patient Protection and Affordable Care Act, the controversial
health reform legislation championed by President Barack Obama.
Each exchange will operate a website where uninsured residents of
the state and small employers can compare various health-plan
options offered by insurance companies, much in the same way that
consumers shop online for hotel rooms and airplane tickets that
suit them best.
The health reform law is designed to help some 30 million
uninsured Americans by expanding Medicaid, the publicly run program
that helps the poor obtain medical care; creating subsidies for
lower-income people to buy private coverage; and establishing the
With enrollment for the exchanges set to begin Oct. 1, 2013, the
Obama administration and its contractors face the mammoth task of
building a federal exchange that can be rolled out in states that
have no insurance exchange and creating a central data hub where
states can verify a person's eligibility for tax credits, premium
subsidies and other health programs, such as Medicaid and the
Children's Health Insurance Program.
Dr. Daniel Derksen, chair of public health policy and management
at the University of Arizona in Tucson and former director of the
New Mexico Office of Health Care Reform, expects the federal
government to "work hard" to get those systems in place but
anticipates "hitches" along the way.
"I think it would be irresponsible to say a switch is going to be flipped and come January 1st  this thing will work perfectly. There's just a lot of moving pieces with this thing," noted Derksen, who led efforts to build New Mexico's health insurance exchange.
Many GOP governors not setting up state-run exchanges
Although the Affordable Care Act, derided as ObamaCare by its
critics, became law in March 2010, many opponents at the state
level dragged their heels on exchange activities pending the U.S.
Supreme Court's decision last June on the law's constitutionality
and the outcome of the November presidential election. Some states
nixed the exchanges, citing anticipated costs, lack of federal
guidance and outright opposition to the law.
Responding to a request from Republican governors, Sebelius last
month extended the deadline for submitting a letter of intent and
application to operate an exchange to Dec. 14. States falling
behind on exchange-building activities can still request help. The
deadline to apply to operate an exchange in partnership with the
federal government is Feb. 15, 2013.
For the most part, states with Republican governors opted to
default to a federal exchange. Just five Republican-led states will
run their own exchanges, and two will partner with the federal
"The great irony of this whole thing is you have the majority of the Republican governors really allowing the federal takeover of health care when they could choose to have a state exchange," Derksen said.
But will people care whether their state is the face behind the
"From a consumer perspective, whether you have a state-run exchange or a federal exchange doesn't make a huge difference," said Caroline Pearson, a director at Avalere Health LLC, a Washington, D.C.-based consulting firm. In either case, she noted, people will get coverage.
Where it begins to matter is in the details, Pearson explained.
States can customize health plan options to accommodate the
particular needs of their residents, she said. And because Medicaid
eligibility rules are state-specific, states may be able to do a
better job of helping lower income people who apply through the
exchange to coordinate coverage with the state Medicaid program,
Avalere Health predicts that roughly two-thirds of the 8.2
million people expected to buy coverage through the exchanges in
2014 will do so through a federally administered or partnership
"Consumers also need to watch the debate over the fiscal cliff," McArdle cautioned. To offset scheduled tax increases and spending cuts slated to take effect in the new year, Congress could reduce health insurance subsidies under the Affordable Care Act, making health coverage less affordable.
"If the fiscal cliff and deficit reduction negotiations were to result in a reduction in federal subsidies available under the ACA [Affordable Care Act] starting in 2014, that could make coverage in the health insurance exchanges less affordable for some people," he said.
Visit the Henry J. Kaiser Family Foundation's state health facts
web page for details on state participation in
health insurance exchanges.
Copyright © 2012
. All rights reserved.
Please be aware that this information is provided to supplement the care provided by your physician. It is neither intended nor implied to be a substitute for professional medical advice. CALL YOUR HEALTHCARE PROVIDER IMMEDIATELY IF YOU THINK YOU MAY HAVE A MEDICAL EMERGENCY. Always seek the advice of your physician or other qualified health provider prior to starting any new treatment or with any questions you may have regarding a medical condition.