Health Information Exchange Featured Article

August 06, 2012

Who, Us? Federal Officials Realizing They May Have to Set up Health Insurance Exchanges in Some States

Many Republican governors have had a field day refusing to set up health insurance exchanges (HIXs), as required by the new healthcare law and upheld by the Supreme Court in June, but their denial won’t last for long. Obama administration officials are getting ready to set up and operate new health insurance markets in about half the states, where local officials have said they won’t, or can’t, according to a story by Robert Pear.

The markets – known as exchanges – are at the heart of President Obama’s health care law, and running them will be a task of overwhelming proportions federal officials never expected to have to perform, Pear wrote.

Two years ago, when Congress passed legislation to expand coverage, the situation seemed a lot more hopeful. Mr. Obama and lawmakers assumed that every state would set up its own exchange, a place where people could shop for insurance and get subsidies to help defray the cost, Pear reported.

But part of the law mandated that states which refused to, or couldn’t, set up HIXs, would simply have to step aside and let the government do it at some point – with or without assistance from state officials.

“We realize that not all states will be ready to establish these exchanges by 2014, so we are setting up a federally facilitated exchange in those states,” Michael Hash, the top federal insurance regulator, told Pear. “We are on track to go live in October 2013, which is the beginning of the first open season for the individual and small group markets.”

So far, governors of only 13 states –nearly one-third of the United States population – have sent letters to the Obama administration saying they will comply, Pear noted.

Federal and state officials and health policy experts are now expecting that the federal government will run the exchanges in about half of the 50 states — a huge undertaking, given the diversity of local insurance markets, according to Pear.

Officials will have to step lightly. “They will encourage people to enroll, promoting the exchange as an important part of Mr. Obama’s health care overhaul. But they do not want to feed fears of a federal takeover or alienate state officials whose help they need,” Pear wrote.

Federal officials have turned to the American subsidiary of a Canadian company, the CGI Group, to provide information technology services to the federal exchanges under a contract that could be worth $93.7 million over five years, Pear revealed.

Some states are holding their noses, but still saying they’ll do it. “Personally, I don’t like the Affordable Care Act,” Mississippi insurance commissioner Mike Chaney, an elected Republican, told the audience at the monthly meeting of the Mississippi Health Insurance Exchange Advisory Board, according to a story by Jeff Amy. “It’s the law, whether you like it or not.”

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Edited by Allison Boccamazzo