HHS gives some states flexibility in decisions on health insurance exchanges


A headline in The New York Times recently confused some people – initially including me.

States Will Be Given Extra Time to Set Up Health Insurance Exchanges,” the paper said on Jan. 15.

Initially I thought the Department of Health and Human Services had delayed the start of the exchanges – which would have been really big news (and I couldn’t imagine how I missed it).

But the exchanges aren’t being pushed back (despite the periodic spates of rumors in Washington that they will be…) Enrollment starts in October 2013. The exchanges will have to be up and running on Jan. 1, 2014 – although I don’t think any of us will be surprised if some states’ exchange debuts are bumpier than others. What the states ARE getting is extra time to make a decision about their exchange – or maybe to reconsider their decision. For states that are running their own exchanges, nothing changed. The deadline was in December and, with a very few exceptions (more below), those decisions are made.

The extra flexibility is for the rest of the states – most of which are letting the federal government run the exchange, and some of which will have a “partnership” exchange, with the federal government doing most of it but the state assuming some functions. The deadline for that decision – fully federal or partnership – is Feb. 15. That’s where HHS is giving them wiggle room.

HHS – which didn’t contemplate running so many of the exchanges in the states – would like nothing more than having more states take on at least part of the exchange. A state that initially decided, “Hey feds, you do it,” could have second thoughts and keep a piece of it. They could say, “Hey we already have insurance officials who regulate the health plans in our state – maybe we’ll keep doing that within the exchange too.” Consumer hotlines and the like may also turn out to be something that states want to run. And HHS will welcome the larger state participation even if it comes later than federal officials would have liked.

As the NYT put it:

A political benefit of this strategy [of giving states more time to choose] is that it allows the administration to keep working with even the most recalcitrant states. Administration officials said they were trying to persuade such states to share the work of running an exchange, supervising health plans and assisting consumers.

HHS hasn’t said explicitly which states it’s trying to woo – but if you’ve been reading the news, you’ll know that Florida is still, surprisingly, a bit of a question mark. Utah’s status is also a bit murky – it has a form of small business exchange of their own, and it’s not clear yet what they will or will not do to bring it into compliance with the Affordable Care Act and even N.J. Gov. Chris Christie didn’t rule out some kind of partnership at some point (although that openness seems more likely for a year or two down the road, not for 2014).

Incidentally, those qualifications – that the exchanges are going ahead but states may have some time to think a bit more – didn’t stop foes of the law from celebrating the “delay.”

“The wheels are coming off the bus, and the Administration is getting desperate,” said the FreedomWorks tea party group in a statement. “FreedomWorks is emboldened by this silent admission of defeat, and we plan to redouble our efforts to block the ObamaCare exchanges and to pressure Congress to reconsider this misguided, unconstitutional law.”

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