Healthcare Business News

Four more states apply to run partnership exchanges as deadline passes

By Rich Daly
Posted: February 19, 2013 - 2:15 pm ET

Seven states in total have applied to run insurance exchanges in tandem with the federal government after four more applied, leaving the feds to operate the marketplaces in at least 26 states in 2014, according to HHS.

The latest applications for partnership exchanges from Iowa, Michigan, New Hampshire and West Virginia came before a delayed Feb. 15 deadline for state applications. That final deadline for states seeking a role next year in operating the insurance marketplaces mandated by the Patient Protection and Affordable Care Act was originally scheduled for Nov. 16.

The health insurance exchanges are scheduled to begin enrolling beneficiaries by Oct. 1 and to provide coverage to 27 million people by 2018, according to projections earlier this month from the Congressional Budget Office.

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In a Tuesday blog post acknowledging that the federal government will operate exchanges in at least 26 states—far more than originally planned—HHS Secretary Kathleen Sebelius emphasized that more state-run exchanges are possible in the future.

“And 2014 is the beginning, not the end,” she wrote. “States will have the option to apply to run their own marketplace in future years.”

HHS has given tentative approval to 20 of the 24 states that have applied to have some role in the operation of the exchanges in their states. Seventeen states and the District of Columbia were tentatively approved to operate state-run marketplaces and three were given a conditional nod to develop exchanges in partnership with HHS.

At least one of those states, Utah, has subsequently changed the details of its application to a “hybrid” model, according to an official in the governor's office. Sebelius hinted at the possibility that HHS may approve arrangements that fall outside the three types of exchanges that HHS rules have outlined as acceptable. “In addition, several other states have suggested their own approaches to contributing toward plan management in their marketplace in 2014,” Sebelius wrote.

HHS officials did not respond to questions seeking details of such arrangements or the number of states proposing them.

Additionally, HHS has rejected a state exchange application from Mississippi.

State officials and health exchange consultants said more states have completed a large amount of work toward operating their own exchanges, but they were unable to complete their work due to delayed information from the federal government.

“The delay in releasing all necessary exchange and Medicaid rules were a significant factor in the governor's decisions not to move forward with a state-based exchange,” Don Hughes, health policy adviser to Arizona Gov. Jan Brewer, said at a Feb. 14 Senate Finance Committee hearing.

Gary Cohen, director of the Center for Consumer Information and Insurance Oversight at CMS, provided some of the first public updates at that hearing, describing some of the details states have sought on federal actions needed for the operation of state-run, partnership or federally operated exchanges. For instance, he said the federal government has signed agreements with all of the departments that will need to submit data to a central hub for use in determining applicants' eligibility for enrollment and subsidies in all types of exchanges.

Additionally, Cohen specified that insurers will submit plans by April 30 that they hope to sell in federal exchanges, but the prices of such plans will not be public until July.

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