State insurance exchanges are not being set up fast enough to meet the
2014 deadline set by the healthcare law, advocates and policy experts
say.
The delay means that a number of state legislatures are at risk of
handing over the central component of the reform effort to the federal
government, which will set up the exchanges for states that fail to do
so.
Governors in 10
states have signed laws that establish an insurance exchange — a new
marketplace where individuals and small businesses will be able to buy
insurance.
gI think that a year ago, many of us who work with states would have
predicted that more states would have passed legislation,h said Anne
Gauthier, senior program director at the National Academy of State Health
Policy. gAlthough exchanges are about as bipartisan an idea as perhaps
exists in the health policy world c politics has played very heavily at
the state level.h
Establishing an exchange is a mammoth undertaking, and states donft
have a lot of time to complete the task.
The exchanges must be up and running by 2014. But itfs in 2013 that the
Health and Human Services Department will evaluate each statefs progress
and determine where it needs to step in with a federally run
gfallback.h
Unless the Supreme Court overturns the healthcare law, staunch
political opposition to implementing it could ultimately give the federal
government more power.
Some governors who oppose the healthcare law arenft flinching despite
the risk of federal intervention. Florida Gov. Rick Scott (R) has
prohibited state agencies from working on an exchange or applying for
federal grant money for a state insurance exchange.
But even in many of the conservative states that havenft passed an
exchange bill, Gauthier said, therefs still a strong desire to retain
control of the program. And HHS officials have unequivocally said they
want the states to create their own systems.
gTheyfre really trying to make it easy for states,h Gauthier said.
States will learn more about whatfs expected of them when HHS releases
its first regulation on the exchanges. That rule — rumored to be as long
as 800 pages — was expected to come out late this week, though the release
has likely slipped.
The handful of states that have already acted might provide some
guidance about the way forward for more reluctant legislatures by showing
that they donft have to deal with some of the most controversial
issues.
There is an intense debate in the healthcare world, for example, over
how much power exchanges should have. Should they be able to actively
negotiate with insurance plans, or simply certify that policies meet
federal standards?
Lawmakers in Maryland and Oregon — states with reputations as leaders
in health policy — left that decision to their exchangesf boards of
directors. California, the first state to pass an exchange bill after
healthcare reform, included a statement that the exchange could be an
active purchaser but left specific decisions to the board.
gIt clearly is possible to make that initial step without having to
address every issue that will ultimately need addressing, and it can buy
the states some time,h said Jennifer Tolbert, who tracks the exchanges for
the Kaiser Family Foundation.
That trend — few states acting, and often punting on key issues when
they do — has shifted the emphasis in state-level lobbying. Supporters of
the healthcare law are putting less emphasis on policy decisions and
focusing instead on governance.
gThe best way to go
is to give a lot of discretion to the exchange, and it can evolve,h said
Tim Jost, a Washington and Lee University law professor.
State lawmakers canft avoid deciding who will have a seat on their
exchangesf boards, and consumer advocates are pressing hard to limit the
influence of insurers. Jost said hefs been dissatisfied with some of the
conflict-of-interest policies that have been passed in the state laws.
Similarly, states have to decide where to house their exchanges. Most
of the early states have opted for a quasi-governmental authority, similar
to the structure in Massachusettsfs exchange, which predates the federal
healthcare law.
Notably, however, West Virginia opted to put its exchange in the
insurance commissionerfs office — an approach many policy experts have
discouraged because it combines the exchange with a regulatory
authority.
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