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Texas Gov. Rick Perry, fighting healthcare reform
Texas Gov. Rick Perry, in a Nov. 15 letter to Sebelius, said his state would "not implement a so-called state exchange."
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Coaxing states

Sebelius extends insurance-exchange deadline another four weeks

By Rich Daly
Posted: November 17, 2012 - 12:01 am ET

A last-minute delay of a deadline for states to declare whether they plan to operate a health insurance exchange could spur more states to do so, according to some health policy experts.

HHS Secretary Kathleen Sebelius wrote Republican governors on the eve of the Nov. 16 deadline to declare their intent on running their own health insurance marketplaces, giving states another four weeks to decide. Her letter followed a Nov. 14 plea from Republican governors for more time to weigh a decision that has huge organizational and fiscal consequences for states.

“Now that the election is over, states need additional time to look at the different options in deciding on setting up their own exchanges, so it's a very good move and it will certainly encourage some states” to set up their own exchanges, Tom Nickels, chief lobbyist for the American Hospital Association, said in an interview.

Hospitals generally prefer states to operate their own exchanges, according to their state and federal advocates, because states are better able to tailor the marketplaces to their own specific mixes of patients and providers. State hospital groups have reported mixed success in their efforts to encourage resistant governors and legislators—mostly Republicans—to pursue the state-run version because of political leaders' concerns about the costs of the exchanges and because of opposition to the underlying law.

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In the days before the latest extension, 13 states and the District of Columbia had told HHS they planned to run their own exchange, and 22 states had done enough planning to-date to allow them to still decide to move forward with at least a partnership exchange, if not a fully self-run exchange, said Alan Weil, executive director of the National Academy of State Health Policy.

The latest delay was more comprehensive than one HHS issued a week earlier, which put off requirements for detailed plans until Dec. 14 but still required a declaration of their intent on running their own exchange by Nov. 16.

At least two Republican-led states indicated they planned to pursue state-run health insurance exchanges in the lead-up to what they believed was a Friday deadline.

Officials in New Mexico and Mississippi plan to submit letters of intent to operate a health insurance marketplace, according to media reports. However, complications are possible in both states.

In the wake of President Barack Obama's re-election, New Mexico Gov. Susana Martinez plans to establish a state-run exchange through an executive order, according to local media reports.

But Republicans in the state Legislature said an exchange would require statutory authority and the state attorney general is reviewing the issue.

State laws vary on whether legislation is required for state-run exchanges. Twelve states and the District of Columbia have enacted authorizing legislation, according to the National Conference of State Legislatures, and four more states have done so through executive orders.

Similar authorizing complications could occur in Mississippi, where the insurance commissioner reportedly decided to submit a letter of intent to HHS to launch an exchange. Commissioner Mike Chaney said he opposes the federal healthcare overhaul but prefers that the state operate an exchange rather than the federal government. His submission was opposed by fellow Republican Gov. Phil Bryant.

In Florida, Republican Gov. Rick Scott expressed a change of heart in an interview with the Associated Press. Scott, a former HCA executive and fervent opponent of the reform law, suggested he was open to having Florida participate in the operation of its exchange. “The election is over and President Obama won,” Scott said.

Florida Gov. Rick Scott wrote Sebelius on Nov. 16 to request a meeting between Florida and federal health officials to discuss needed details on health insurance exchanges before the state will decide whether to run its own marketplace.

Texas Gov. Rick Perry, however, said in a Nov. 15 letter to Sebelius that Texas “will not implement a so-called state exchange.”

“It would not be fiscally responsible to put hard-working Texans on the financial hook for an unknown amount of money to operate a system under rules that have not even been written,” Perry said in the letter. “As long as the federal government has the ability to force unknown mandates and costs upon our citizens, while retaining the sole power in approving what an exchange looks like, the notion of a state exchange is merely an illusion.”

In addition to Perry, Republican governors in Alaska, Indiana, Louisiana, Nebraska, Ohio, Virginia and Wyoming have all indicated they will not pursue state-run exchanges. But it remained unclear whether any of them would pursue partnership exchanges jointly run with the federal government. Last week, Sebelius extended the deadline for states to commit to those federal-state marketplaces to Feb. 15.

North Carolina Gov. Beverly Perdue, a Democrat, said Nov. 15 that her state would operate a hybrid exchange in partnership with the federal government.

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