More States Opt for Federal Health Exchanges than Expected

An important state health insurance exchange (HIX) deadline has come and gone, and it seems that more states will be opting for the federal option than experts originally thought.

In line with implementation of the exchanges under the Affordable Care Act, states had three options to choose between. There was the state-based exchange, in which a state would run its own HIX, the federal-exchange which ceded control of the HIX to the federal government, and a partnership option where the state and federal governments work together.

The Department of Health and Human Services (HHS) set a deadline of December 14^th for states to report their decision.  States that opted to run their own exchanges were also required to submit blueprints of the HIX plans for approval. This deadline was moved from November at the request of the Republican Governors Association. NAHAM News previously reported the shift on November 16^th (States Given More Time to Work on Health Exchanges).

The deadline has come and gone, with 18 states and the District of Columbia opting for their own exchanges. An additional 7 states have indicated that they will partner with the federal government, and the remaining 25 states default to the federal exchange. These partnership numbers may change slightly, however, because states that are not running their own exchanges have until by February 15, 2013 to partner with HHS.

State run exchanges will be put in place by California, Colorado, Connecticut, District of Columbia, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Nevada, New Mexico, New York, Oregon, Rhode Island, Utah, Vermont, and Washington.

Partnership exchanges will be put in place by Arkansas, Delaware, Illinois, Iowa, Michigan, North Carolina, and West Virginia.

These numbers are interesting for a number of reasons. First of all, many of the states that defaulted to the federal system have Republican governors who emphasize the importance of the state government. Some of those governors have supported their decision to default to the federal option by calling a state HIX, “state run in name only.”

Secondly, most experts expected the number of states that opted for the federal option to be much lower.  Mostly, only small states were supposed to default to the federal system. While states can switch to their own health exchanges in future years, the logistics of the first year are going to be a challenge for HHS.

See the Kaiser Family Foundation map of States decisions here. This article was written with research from and NPR article, and a Healthcare IT News article.