On the eve of a big deadline for states, the Obama administration decided to give them another month to decide whether to build their own online health insurance markets or leave exchange-building to the federal government.
States were supposed to inform the Department of Health and Human Services of their plans on Friday. Thursday night, HHS Secretary Kathleen Sebelius wrote governors to say they could have longer—until Dec. 14.
The extension is the second in as many weeks. Last week, Sebelius told states that an earlier deadline to submit detailed state plans on Friday would be extended. States that wish to build their own exchanges were asked to submit plans in December. Those that wish to collaborate with the federal government were asked to submit their plans by mid-February. Both of those deadlines remain unchanged.
“We are confident governors will have enough time to decide whether they want to establish an exchange,” the letter says. “We look forward to working with governors as we continue to implement the law.”
The letter comes in response to a missive this week from the Republican Governors Association, which is meeting this week in Las Vegas. The Republican governors had asked for just such an extension, saying that missing regulations on key exchange questions has delayed their decision-making. More likely, though, governors had been holding out until after the Nov. 6 election, waiting to see if the health reform law would stand or fall, based on whether President Obama or Mitt Romney won.
Since the election, the Republican governors appear to have split. Some have come out against any cooperation in building exchanges. Others, who had previously opposed the law, suddenly sounded more conciliatory.
States and industry predict that HHS will publish several of the outstanding regulations before Thanksgiving. The Office of Management and Budget has had a key proposed rule since last week, but has not yet published its contents.
In granting the extension, HHS suggested that it expects more states will now come in. Whether there will be time for them to build robust exchanges is unclear. States ahead in the game report that the process has proven more complicated and time-consuming than expected, in part because the federal government is working simultaneously to build pieces of the system and has had its own set of delays.
“There are numerous obstacles,” said Dan Schuyler, a director at Leavitt Partners, a consultancy that is advising several states on exchange-buidling. “It’s going to be interesting to see.”