States Given More Time to Work on Health Exchanges

In a confusing week for the healthcare industry, the newly re-elected Obama administration has twice changed the insurance exchange deadline, giving states extra time to work on their health insurance exchange plan.

Kathleen Sebelius, Secretary of the Department of Health and Human Services (HHS), sent a letter to Governors on November 9^th stating that the administration still expected states to declare whether they intend to operate their own exchanges, or opt for the federal government to set up their exchange, by Friday, November 16^th.  The letter further stated, however, that states now had until December 14^th to file blueprints showing specifically how they would operate the marketplaces. These dates are according to a Reuters report found here.

Sec. Sebelius then sent another letter late on Thursday, the day before the declaration deadline, pushing that deadline back to December 14^th as well. The article by Kaiser Health News can be found here.

The decision was in response to the Republican Governors Association (RGA) request Wednesday to extend the deadlines until HHS publishes rules detailing how the exchanges would work. A slew of regulations are expected to be published in the next few weeks. In a statement last night, the RGA thanked the agency for its response.

As previously written by NAHAM News, the health insurance exchanges (known as HIX or HEX) are a key part of the Obama Healthcare Law, also known as Obamacare. The law sets up these exchanges to allow millions of individuals to shop for insurance coverage and find out if they are eligible for government subsidies or Medicaid.

The law allows (and encourages) states to set up their own exchanges, and requires the federal government to step in to build and operate exchanges in states that choose not to set up their own.

As of Thursday, 17 states and the District of Columbia had committed to setting up their own exchanges. Those states are California, Oregon, Minnesota, Washington, Nevada, New Mexico, Utah, Colorado, Kentucky, West Virginia, New York, Vermont, Connecticut, Massachusetts, Mississippi, Rhode Island and Hawaii.

Seven states remain undecided on whether to build state-based exchanges. The undecided states are Tennessee, Pennsylvania, Idaho, New Jersey, Oklahoma, Arizona and Wisconsin.

The remaining states will most likely chose the third option, allowing those states to develop their exchanges in partnership with the federal government. States that chose the partnership option will have until February 15^th, 2013 to declare their intentions and prepare the paperwork.

Previous letters have strongly stated that no matter what option states chose, or when they declare their intentions, consumers in all 50 states and the District of Columbia will need to have access to insurance through these new marketplaces on January 1, 2014.