States Will be Given Extra Time to Set Up Insurance Exchanges

The White House and the Department of Health and Human Services (HHS) have announced that states will have more time to comply with a part of the health care reform law. According to a New York Times article, HHS Secretary Kathleen Sebelius even went so far as to say that she would extend or altogether waive deadlines for states that expressed an interest in setting up their own healthcare insurance exchanges (HIX). She would also extend deadlines for states that were willing to take an active role in setting up a partner exchange with the federal government.

According to the original law, known as the Affordable Care Act (ACA), states were supposed to submit HIX plans to HHS in late 2012. This would ensure that the agency could determine, by January 1, 2013, whether the exchanges were going to be ready to operate in time.  The ACA was passed in 2010, but many states did not start planning. Twenty-six states sued the federal government over the law, and delayed preparations pending the outcome of that case, which went before the Supreme Court. Even after the Court upheld the vast majority of the law, many states held out hope for the 2012 election, thinking that a Republican President would repeal the law.  The President was re-elected, however, and states that were waiting to plan were sent scrambling.

HHS has already delayed the deadlines once at the request of the Republican Governors Association, as NAHAM News has previously reported (Why All the Deadline Changes?), but many states still have yet to file plans. Any state that opts not to run their own HIX would default to a federal government run exchange. While HHS expected to run several, they did not expect to have to step in to run exchanges in over half of the states.

This overwhelming realization could be a main factor in the most recent shift in deadlines. HHS may be trying to cater to the states in an effort to bring more of them into the planning process. HHS has also said that they are willing to work on an individual level with states that gain initial approval to set up their own exchanges. The individual attention could entice states to work with HHS.

Despite the setbacks, there are still a number of firm deadlines that states and the federal government have to stick to. All exchanges, whether they are state or federally run, have to be ready for open enrollment on October 1^st of this year. Coverage under those plans will begin on January 1, 2014.