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Federal Government To Operate Most Health Exchanges, Study Finds

The federal government will operate health insurance exchanges under the Affordable Care Act in a majority of states, according to an analysis by Avalere Health, The Hill's "Healthwatch" reports.

As of Thursday -- one day before the federal deadline for states to declare whether they intend to run their own exchange -- 14 states and the District of Columbia had submitted plans, while three more states publicly have committed to operate their own exchange (Viebeck, "Healthwatch," The Hill, 12/13).
Background

Under the ACA, states can operate their own exchange, partner with the federal government or let the government run an exchange for them (Lengell, Washington Times, 12/13).

In a letter sent to governors in November, HHS Secretary Kathleen Sebelius said the administration was extending the deadline for states to submit detailed applications -- or blueprints -- required by federal officials to Dec. 14, but the Nov. 16 deadline to notify HHS of their decisions would stand.

Meanwhile, states that intend to partner with the government will have until Feb. 15 to submit their declaration letter and blueprint. Sebelius noted that the extended deadlines would not affect the anticipated launch of the exchanges in January 2014.

Details of Analysis

Because a large number of states are defaulting to federally run exchanges, Avalere estimated that two-thirds of U.S. residents who obtain coverage through an exchange under the ACA will do so in either a federally run exchange or a partnership exchange ("Healthwatch," The Hill, 12/13). Some experts predict that the federal government ultimately could be responsible for running exchanges in more than 30 states.

GOP Lawmakers Point to Compliance Costs, Lack of Guidelines as Reasons for States' Choices

At a House Energy and Commerce Subcommittee on Health hearing on Thursday, Republican lawmakers pointed to compliance costs and a lack of federal guidelines on the exchanges for many states' reluctance to run their own insurance marketplace, Reuters reports. Rep. Michael Burgess (R-Texas) said, "The uncertain regulatory environment and the overall lack of response from HHS are not encouraging the states or the health plans to move forward."

However, Rep. Frank Pallone (D-N.J.) countered that Republicans who oppose the law for political reasons are simply trying "to delay implementation under the guise of lack of information" (Morgan, Reuters, 12/13). Rep. Henry Waxman (D-Calif.) added, "For some states, no amount of information will ever be enough. And that's the tragedy of politicizing the law" (Sanger-Katz, National Journal, 12/13).

Experts Doubt Federal Government's Ability To Operate Exchanges

Meanwhile, some experts raised questions about the federal government's ability to successfully operate exchanges for so many states. Experts say the largest challenges for HHS will be the creation of a health IT system that can exchange data with multiple states, as well as providing adequate customer service to handle enrollment (Reuters, 12/13).

CMS Refuses To Delay Insurance Exchange Rules

In related news, Gary Cohen -- director of CMS' Center for Consumer Information and Insurance Oversight -- denied Republican senators' request to extend the comment period and delay the finalization of rules governing the health insurance exchanges, Modern Healthcare reports.

"There's not a lot of time between now and October, and people are saying that we need to get these rules; the [insurance] industry in particular is saying 'We need to get these rules finalized in order to know how to develop plans and get them into states,'" Cohen said (Daly, Modern Healthcare, 12/13). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.