Illinois became the third state to receive conditional approval to launch a health insurance exchange in partnership with the federal government less than eight months from now.
The announcement came days before a Feb. 15 deadline for states to apply to participate in that model in 2014. The deadline is three months later than originally planned. The Obama administration extended the window in November to give more time to states with newly elected governors and others that awaited the presidential election outcome to choose a direction.
The partnership model is one of three options for health insurance exchanges—recently rebranded by HHS as marketplaces—required by the Patient Protection and Affordable Care Act. States also can apply to operate their own marketplaces or they can take no action and default to a federally operated exchange.
Illinois joined Arkansas and Delaware in receiving tentative approval to operate an exchange in coordination with the federal government. At least five states have applied to operate such coordinated exchanges with the federal government, according to HHS.
HHS Secretary Kathleen Sebelius announced
Illinois' conditional nod, which requires the state to take additional steps before receiving final approval, during a visit Wednesday to Chicago.
“Working together, we will be ready in eight months when residents of Illinois will be able to use the new marketplace to easily purchase quality, affordable health insurance plans,” Sebelius said in a news release.
Illinois Gov. Pat Quinn said “hundreds of thousands of people” will gain coverage through the exchange. “They will also gain the peace of mind that comes from knowing that the care will be there if they need it,” he said.
There is no deadline for the federal government to give either conditional or final approvals to partnership applications.
Seventeen states and the District of Columbia have received conditional approval to operate state-run exchanges
. The deadline for states to apply for this model was Jan. 1.
Mississippi's application for a state-run exchange, submitted by Mississippi Insurance Commissioner Mike Chaney, was rejected last week because federal officials concluded he lacked the authority to include Medicaid in it. The federal healthcare law required Medicaid enrollment as an exchange component. The state's Republican leadership has opposed any state involvement in an exchange or expanding the Medicaid program, as sought by the 2010 federal law.
At least one of the conditionally approved state-run exchange applications was switched to a partnership application.
Last week, Utah Gov. Gary Herbert (R) said in a speech at the conservative American Enterprise Institute that he withdrew the state's application to run its own exchange and would instead try to operate a partnership model with the federal government. Herbert said he talked with Sebelius during a Feb. 5 meeting about using the state's existing 7-year-old insurance marketplace, known as Avenue H
, as a way to provide the exchange's small-business coverage.
About 30 states are expected to default to a federally operated exchange, according to health policy experts. Some experts have raised doubts about whether federal officials will have the time and resources to design and implement unique exchanges for each state that does not operate its own or launch one in partnership with the federal government.
Federal officials have consistently said federally run exchanges are on track to begin enrollment on Oct. 1 but have declined to release almost any details of each states' exchange or where they stand in the implementation process
All three types of exchanges are required to begin open enrollment Oct. 1 and start coverage on Jan. 1, 2014, when the federal law will require most Americans to have qualifying health insurance.