Exchange deadline passes, 26 states opt in with feds

By Tom Howell Jr. The Washington Times

Saturday, February 16, 2013

The backbone of President Obama’s health care law is taking shape, with 26 states choosing to let the federal government
run the online insurance markets mandated by his signature reforms
instead of keeping the job in-house or partnering with the feds.

The Department of Health and Human Services
had encouraged states to run their own markets, or “exchanges,” that
help the uninsured find coverage. Only 17 states and the District took
on the task while seven states decided to split the duties, according to
a breakdown by the Kaiser Family Foundation.

The exchanges, which are designed to let those without employer-based insurance compare
and buy plans with the help of tax credits, are a crucial part of the
Patient Protection and Affordable Care Act that passed in 2010 and was
largely upheld by the Supreme Court in June. States that wanted to run a partnership exchange with the federal government had to let HHS know by late Friday, ending months or even years of debate among governors and state lawmakers.

Their discussions marked one of two major decisions under “Obamacare.”
Whether or not to expand Medicaid within their borders is the other, and
it remains a source of contention in state capitals across the country.

The Obama administration says it will be ready to run exchanges in more than half of the states,
even though a bevy of Republican governors and lawmakers flouted their
intentions by saddling them with the task.

“It’s not what the drafters of the bill had hoped would happen,” Timothy S. Jost, a professor at Washington and Lee University School of Law who specializes in health care, said of the outcome on Friday.

State leaders who deferred to the federal government
cited numerous reasons for their choices; among them, they wanted to
distance themselves from Mr. Obama’s first-term achievement, could not
obtain enough information to make an informed decision or ran out of
time after Mitt Romney lost the presidential election. That loss effectively ended Republicans’ hopes of repealing the health care law.

New Jersey Gov. Chris Christie sent a letter to HHS Secretary Kathleen
Sebelius on Friday to confirm his previously stated preference for a
federally run exchange.

West Virginia, meanwhile, applied for a partnership exchange “to retain our ability to
assist consumers and maintain our traditional authority to regulate
health insurance” in the state, said Jeremiah Samples, an official at
the West Virginia Insurance Commission. He said that after months of
analysis, officials decided that a state-run exchange would not be worth
it because of the state’s relatively small market and the hefty
information-technology costs associated with the exchange.

From the start, HHS advised states to run the exchanges so they could tailor
them to their residents’ needs. But the majority said no.

Mr. Jost said the tilt toward federally run exchanges may help officials in
Washington stay on the same page during the early stages of
implementation because the marketplaces rely on computer networks that
will share data among several federal agencies.

“It’s not a particularly bad thing at this point to be doing it this way,” Mr. Jost said.

Federal health officials declined to comment on the states’ decisions before
midnight Friday, making it unlikely they will weigh in on the spectrum
of exchanges until this week.

The Obama administration is striking an optimistic tone less than eight months before enrollment begins, despite the burden of implementation.

“We are making great progress, we are on track, and we will be ready for
people all across the country to obtain high-quality affordable health
care coverage beginning on Oct. 1,” Gary Cohen, director of the Center
for Consumer Information and Insurance Oversight, told the Senate
Finance Committee on Thursday.