Health Exchanges to Be Run by 18 States as Most Governors Pass

By Alex Wayne | Dec 17, 2012 9:51 AM ET

Governors in 18 of the 50 U.S. states agreed to build health-insurance exchanges, a final tally
that leaves the federal government with the duty of running
marketplaces for the majority of the nation through 2014.

Idaho, Nevada and Utah were among the states that submitted
blueprint applications to the Obama administration by the Dec.
14 deadline to create exchanges for residents to shop for
insurance as part of the Affordable Care Act, the Department of
and Human Services said today. Governors who opted out
said they balked at the federal regulations they would have to
adhere to and long-term costs they would have to bear.

“The majority of states will play
an active role operating their exchanges,” Kathleen Sebelius, the U.S.
health secretary, said in a blog post. Photographer: Mark Wilson/Getty

Four states — Delaware, Illinois, Iowa and North Carolina
— plan to contribute some services to a federally built
exchange in a partnership with the Obama administration, Gary Cohen, who directs the U.S. Center for Consumer Information and
Insurance Oversight, said last week. Those states may take on
functions such as plan selection and customer assistance, while
the federal government builds the websites and other

Avalere projects that the number of states in partnership
with the government may eventually reach 12.

Federal Funding

Under the law, the exchanges are designed to allow
consumers who don’t have medical coverage through their jobs
beginning in 2014 to easily compare health plans, and then buy
coverage online and through telephone services. The U.S. is
subsidizing the cost for those who can’t afford coverage.

Funding for states to build their own exchanges is
essentially unlimited, and the U.S. has given $1.8 billion so
far, including to some states that have said they won’t complete
the work, Cohen said in prepared remarks for a Dec. 9
congressional hearing.

States still have to come up with their own money to run
the marketplaces. Nebraska Governor Dave Heineman, a Republican,
said it would cost about $81 million a year to run an exchange
while the federal government could do the same job for about 27
percent of that amount. Connecticut anticipates a cost of about
$30 million a year, said Kevin Counihan, the CEO of the
Connecticut Health Insurance Exchange.