Tick … tick … tick … the deadline is nigh. With the Supreme Court’s decision to uphold most of the Affordable Care Act, states that delayed or outright refused to set up health insurance exchanges (HIX), one of the cornerstones of the act, are now compelled to do so. And they must do so by Jan. 1, 2014. That’s a very short runway on which to land a very large plane.
Only 16 states and Washington, D.C., have passed legislation or issued an executive order establishing a health insurance exchange as of July 2012, according to The Commonwealth Fund. That leaves 34 states scrambling. And the next important deadline isn’t in 2014. It’s Nov. 16 of this year, when those states have to declare to the U.S. Department of Health and Human Services (HHS), in writing, what they plan to do.
What can they do? The Alliance for Health Reform tried to help answer that question in July, when it held a seminar bluntly titled, “Health Insurance Exchanges: Can States and the Federal Government Meet the Deadline?” The speakers included representatives from HHS, the National Governors Association and the National Association of Insurance Commissioners. They agreed that the short answer to the titular question is, yes, they will meet the deadline -- because the law says they have to. The longer answer is more complicated, of course.
Event speakers Sara Collins, a vice president of The Commonwealth Fund, and Timothy S. Jost, a professor at the Washington and Lee University School of Law, both say that the remaining states have a couple options left. They can try to get their own exchange up in time. They can continue to balk, in which case their citizens will have to purchase insurance through the federal exchange. Or they can strike a short-term partnership with the feds and, in effect, buy themselves some more time.
The third option may be the best, says Jost. “Everyone [at the seminar] agreed that state insurance commissioners know their markets better than the federal government, and that those commissioners should be in charge of those markets, which now include an exchange. The problem is that states who have been doing nothing will not get there in time.” But, he adds, one HHS representative at the event made it clear that the feds are ready to take over. “I was particularly gratified to hear [Acting Director of the HHS Center for Consumer Information and Insurance Oversight] Mike Hash say that the federal exchange is moving full speed ahead and working on compatibility issues with states,” Jost says. “They realize states are still holding back, but want to encourage them to be prepared to join their exchange if needed.”
Some states are holding back in part because they hope a Mitt Romney presidency and a Republican Congress would scuttle the ACA. Short of that, these states most likely will announce on Nov. 16 that they plan to partner with the feds. After that, “The smartest thing is to set up a state HIX and take control,” says Jost.
Collins agrees. “We may see more states using the federal exchange at the outset, and then creating their own later on,” she says. There is a significant amount of federal money still available to the states to help create their own exchange. “The grants are available through the end of 2014, and [can be used] beyond 2014,” she says.
The ACA allows considerable design creativity for state exchanges, which Collins says furthers the argument that even the most obstinate states would be wise to bring an exchange under their control. But whether a state chooses to do so or not, it won’t be left hung out to dry. “The important thing from the consumer’s perspective,” Collins says, “is that each state will have an insurance exchange in 2014.”
That’s the law, after all.