Smart Benefits: More States Reject State-Run Health Exchanges

Smart Benefits: More States Reject State-Run Health Exchanges

Six more states said no to state-run health exchanges this week, forcing the Department of Health and Human Services to extend the deadline for states to declare their intent about setting up an exchange from November 14 to December 14, 2012.

The exchanges, a requirement of federal healthcare reform, are meant to be online marketplaces where uninsured individuals can shop for coverage, find out if they qualify for federal subsidies and compare plans. While many thought President Obama’s re-election would signal states to finally move forward with planning for the exchanges, Nebraska, Texas, Alaska, Indiana, North Carolina and South Carolina have joined 20 other states in declaring that they won’t set up the exchanges but wait for the federal government to intervene instead.

States State Concerns

The states rejecting the state-run exchanges cite a variety of reasons for their opposition, including:

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• high costs to establish and operate

• uncertainty about availability of funding the subsidies for those who would qualify

• concerns that the states should not be administering federal laws and that the exchanges should be federally run

Rhode Island Bucks the Trend

Unlike the decision by the six states last week, Rhode Island has been an early adopter of the exchange, moving towards the October 1, 2013, deadline to be operational. That doesn’t mean, however, that it doesn’t have its naysayers.

Some critics claim the Rhode Island exchange agenda has been overly ambitious in some respects. The federal law is intended to help the uninsured and Medicaid eligible population first. But there’s been discussion about the possibility of including small businesses in the Rhode Island exchange immediately as well as making the exchange a single payer system for all employers.

Will Exchanges be Operational by Oct 1, 2013?

With so many states putting up roadblocks to the exchanges, is the federal government ready to start planning them instead? And if that’s the case, can HHS meet its deadline of October 1, 2013, or will the exchanges be delayed until 2015 … or beyond?

Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.

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