Skip Navigation

Close and don't show again.

Your browser is out of date.

You may not get the full experience here on National Journal.

Please upgrade your browser to any of the following supported browsers:

Health Exchanges a Tough Sell With Many States Health Exchanges a Tough Sell With Many States

NEXT :
This ad will end in seconds
 
Close X

Not a member or subscriber? Learn More »

Forget Your Password?

Don't have an account? Register »

Reveal Navigation
 

 

Health Exchanges a Tough Sell With Many States

CORRECTION: an earlier version of this story misspelled the name of Mike Schrimpf.

In hopes of encouraging reluctant states to embrace the new health care law, the Obama administration has extended its deadlines to commit to running new insurance marketplaces and has published answers to states' biggest questions. But most states will probably still sit on the sidelines.

 

President Obama's signature health care law was designed around the idea that new access to health insurance for individuals and small businesses would be crafted in partnership with state governments, which have traditionally regulated their own insurance products. The federal government would perform some functions but leave many details to the states. The idea is to have the new online marketplaces, known as exchanges, up and running by late 2013 to allow the new insurance coverage to begin in 2014.

Friday is the final deadline for states that wish to run their own exchanges to submit their plans.

So far, many states have been reluctant to take on the task, which means the federal government will do it for them. As of Thursday, only 14 states and the District of Columbia had submitted the detailed applications to create state-based exchanges required by the Health and Human Services Department. Three more states have publically declared their intention to submit. (Consultants watching the states closely say there are perhaps two more that may come in Friday.)

 

“I think it’s fair to say that in the journey the Affordable Care Act has taken, it was wise not to have any expectations,” said Gary Cohen, the director of the Center for Consumer Information and Insurance Oversight, in a press briefing on Thursday, about his response to the low number of states eager to sign on. “We talk to states every day; we know that many of them are engaged with us; and we’re going to wait and see what they do.”

A larger number of states are opting for a federally run exchange, originally described as the “fallback.” About 22 states have indicated they will stop pursuing exchange planning altogether—the exact number won’t be clear until February, when states that want to share responsibilities will need to declare their intentions.

Technical challenges and regulatory delays have played a role in the states' reticence. But political considerations have also been important, as many governors opposed to the health reform law are loathe to cooperate with its implementation, even if a state-based exchange might make practical sense. Most states that have ruled out state exchanges have Republican governors. Most that are moving forward are run by Democrats.

“Some of it is driven by the politics. Some of it is driven by the difficulties of putting together an exchange,” said Joel Ario, a managing director at Manatt Health Solutions and the former top exchange official at HHS.

 

The exchanges were envisioned as simple, streamlined websites in which people would be able to shop for health insurance. To work, they need to connect to available insurance plans, the states' Medicaid programs, and a federal hub that can calculate any tax credits available to help lower-income people afford insurance.

HHS has been working to encourage states to sign on. The more states with a federally facilitated exchange, the greater the federal burden and likelihood of overlapping regulatory structures and clumsy communications. HHS first offered states the option to build a “partnership” exchange, where it would share responsibility with the department. Then, in response to a request from the Republican Governors Association, it delayed the deadline for states to decide. This week, it put out a detailed FAQ document, answering many of the questions commonly posed by uncertain states. It also conditionally approved its first applications, giving the green light to six plans.

Neither the delays nor the additional regulatory guidance appear to have done much to sway the Republican governors.

“We have, of course, been asking questions for months, and then they delayed it by a month, and less than a week before the exchanges are due they finally attempt to answer all of the questions,” said Mike Schrimpf, a spokesman for the RGA. “For them to respond to the governors’ questions a week before the deadline, I think, is not a serious effort on their part.”

The small number is clearly disappointing to those who crafted the law. In a House hearing on exchanges on Thursday, Rep. Henry Waxman, D-Calif., the ranking member on the Energy and Commerce Committee, vented frustration with governors who have refused to sign on. “For some states, no amount of information will ever be enough,” he said. “And that’s the tragedy of politicizing the law.”

But administration officials and outside experts express hope that states will eventually decide they want to take an active role in the exchanges.

“The other states will learn it will be easier,” Cohen said. “I think it will be a much easier decision for states. If they can’t do it in 2014, they may do it in 2015."

 Erin Mershon contributed

Comments
comments powered by Disqus
 
MORE NATIONAL JOURNAL