Surge of exchange plans expected from states

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President Barack Obama's re-election and a post-election deadline extension are expected to produce a surge of states submitting insurance exchange plans to the CMS.

The election may have resolved the political battle over the Patient Protection and Affordable Care Act enough for half or more of the states to move forward with creating their own health insurance exchanges, according to policy experts. The proof of that could come Nov. 16 when letters of intent signaling states' plans to launch exchanges are due at the CMS so the agency has enough time to sign off on them by Jan. 1. The specific blueprints detailing those state exchanges were due the same day as the letters, but HHS Secretary Kathleen Sebelius wrote governors on Nov. 9 to give them until Dec. 14.

Sixteen states have enacted exchanges through either statute or executive orders, according to the National Conference of State Legislatures, and are expected to submit plans for CMS review. But another 10 states could have applications ready within a few weeks, given the results of the election, according to exchange experts tracking them.

“There are several states that have postured with the position of 'we're not going to move forward,' but they hedged their bets by doing some planning,” said Cheryl Smith, a director at Leavitt Partners, which advises states on exchanges.

A CMS spokeswoman declined to comment on the number of states that had submitted applications in the immediate aftermath of the election.

The delay in submitting blueprints may spur hospitals and their advocates to take more active roles in convincing state political leaders to enact state-run exchanges and avoid the alternative of an exchange operated by HHS.

Dr. Delos “Toby” Cosgrove, president and CEO of the Cleveland Clinic, told Modern Healthcare that the system has not yet heard from Ohio Gov. John Kasich, a Republican, if the state will choose to operate a state exchange and whether it will expand its Medicaid program. “We're encouraging him on both issues,” Cosgrove said, adding that the Cleveland Clinic would be “an active participant” in establishing the form of a health insurance exchange and participating in it.

More states might move forward with their own exchanges, according to experts, if HHS issues a series of long-awaited rules, including those detailing the federally run version of exchanges and the essential health benefits required of plans that participate in them.

The other option is for states to pursue a “partnership” model in which state and federal governments split responsibilities for the exchange. Sebelius' letter gave states until Feb. 15, 2013, to submit partnership plans.

Deborah Bachrach, a special counsel at Manatt, Phelps and Phillips, said the time pressures will lead some states to use the partnership model as a “way station” until they can operate their own.

Despite the outcome of the election, though, many states are expected to default to a federally run exchange because of their elected leaders' political opposition to the federal healthcare law. Nine states explicitly decided not to create a state-operated exchange, according to the NCSL, and another state moved in that direction Nov. 6 when Missouri voters passed a ballot measure blocking the governor from creating an exchange by executive order.

—with Jessica Zigmond



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