Healthcare Business News

Most states holding off on insurance exchanges, Tavenner says

By Rich Daly
Posted: June 7, 2012 - 11:00 am ET

About 30 states will not move forward on creation of state-based exchanges until after both a U.S. Supreme Court decision on the federal healthcare overhaul and the November presidential election, according to the head of the CMS.

Marilyn Tavenner, acting administrator of CMS, told a Washington gathering of accountable care organization advocates and experts on Thursday that the large number of states waiting for the court ruling and the election outcome before deciding whether to move forward with the insurance marketplaces required by the law is one of her leading concerns.

“What keeps me up at night is knowing around December, there are going to be like 30 states who want to come in and be state-based exchanges, so we are trying to do a lot of quiet preparation, if you will, in the background to make sure we are ready for that,” Tavenner said.

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The number of hold-out states is more than the 27 states that have sued to have the entire law thrown out. A Supreme Court decision is expected in late June. Similarly, Mitt Romney, the presumptive Republican presidential candidate, has promised to lead the law's repeal if he is elected.

Under provisions of the Patient Protection and Affordable Care Act, any state that does not receive CMS certification in January 2013 that its exchange is likely to meet the operational deadline of January 2014 will have an exchange created by the federal government. Federal officials have repeatedly said they prefer states to create their own exchanges, and the CMS has proposed rules to allow hybrid versions of a state-federal exchange, which would allow state control of some components if they are not prepared to operate the entire marketplace. As a backup, the CMS also is focused on developing a federal-run exchange, she said.

The exchanges are a marquee feature of the law and the mechanism through which about 16 million currently uninsured people are expected to gain coverage under the law.

Tavenner's estimate implied that only about 20 states are moving forward with plans to operate an exchange, although she declined reporters' requests after her address to clarify the numbers involved.

However, officials from some of the roughly 30 states declining—for now—to advance exchanges have attended CMS meetings to hear what they would need to do ultimately to implement such marketplaces, she said told reporters.

After the election, “they will want to be state-based because most states like their independence; they like control of their own programs, as we have seen with Medicaid,” Tavenner said, citing the example of her home state, Virginia.

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