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Four partnership exchanges get initial nod

By Rich Daly
Posted: March 7, 2013 - 2:00 pm ET

Four more states were given tentative approval to operate health insurance exchanges in partnership with the federal government on Thursday.

HHS conditionally approved state partnership marketplaces in Iowa, Michigan, New Hampshire and West Virginia, which allow them to operate various components of the marketplaces scheduled to begin enrollment in October. Those approvals increased the number of tentatively approved partnership states to seven, while 17 other states plus the District of Columbia were conditionally cleared to operate their own insurance marketplaces. At least 26 states will have exchanges fully operated by federal officials.

The latest partnership states include two Republican-led states—Michigan and Iowa—which increased the number of Republican governors who have proposed some state role of the insurance marketplaces to six—Idaho, Nevada, New Mexico and Utah. However, at least one of those states—Utah—has significantly changed its proposal since it was tentatively approved, according to a spokesman for the governor. HHS also rejected an exchange proposal from the Republican insurance commissioner in Mississippi on the grounds that the governor opposed it.

HHS Secretary Kathleen Sebelius on Thursday repeated frequent assurances from federal officials that all three types of exchanges will be ready to begin enrolling beneficiaries in all 50 states by Oct. 1.

“Working together, we will be ready in seven months when consumers will be able to use the new marketplace to easily purchase quality, affordable health insurance plans,” Sebelius said in a news release.

But a senior congressional Democrat warned on Wednesday that reduced funding for the exchanges in a House-passed bill to keep the federal government running through the rest of the fiscal year could prevent them from launching on time.

“Specifically, this bill will delay implementation of the Affordable Care Act, scheduled to begin enrolling participants in October,” Rep. Nita Lowey, D-N.Y., ranking Democrat on the House Appropriations Committee, said in a floor speech. “Without IT infrastructure to process enrollments and payments, verify eligibility and establish call centers, health insurance for millions of Americans could be further delayed.”

The exchanges are expected to provide insurance coverage to 7 million enrollees in 2014 and grow to 27 million enrollees by 2018, according to February estimates by the Congressional Budget Office. The $35 billion in federal subsidies for 6 million exchange enrollees in 2014 was expected to grow to $141 billion for 22 million enrollees by 2018.

The marketplaces, which are core elements of the Patient Protection and Affordable Care Act, were one of the principle ways through which the law was expected to extend coverage to about 30 million uninsured people.

Meanwhile, none of the 26 states that are expected to have federally operated exchanges has indicated any reluctance to provide the exchange-related assistance sought by federal officials, according to Gary Cohen, director of the Center for Consumer Information and Insurance Oversight at CMS. The agency has left it to those states to review insurers’ plans in their states for compliance with both state law and new federal rules.

“So what we expect and are hearing from them is that they will enforce and ensure compliance with all of the market reform provisions of the Affordable Care Act,” Cohen said in a call with reporters Thursday. “What we’ve told the states is that we are going to rely to the greatest extent possible on the work that they do to make sure that plans are in compliance with things like essential health benefits, actuarial value and all of the various provisions that apply both within the exchange and outside the exchange.”

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