Exchange deadline may be a soft one

The Obama administration official overseeing the establishment of state health insurance exchanges left open the possibility Thursday that no states will establish such marketplaces by the 2014 statutory deadline.

Steve Larsen, deputy administrator and director of the Center for Consumer Information and Insurance Oversight at the CMS, described at a news briefing in Washington the various activities that some states have undertaken to establish their own exchanges—a central component of the Patient Protection and Affordable Care Act. However, even the states furthest along in the process have multiple complex steps left to undertake before the deadline.

“It's a little early at this point for us to say with respect to a particular state, ‘That state is going to meet it,'” Larsen said when asked if any state will meet the deadline.

Under the healthcare reform law, HHS must approve state exchange plans by Jan. 1, 2013 or move to establish a federal version.

Only a few states have passed the initial legislation required to begin the process of setting up exchanges, and many observers fear that states will not complete the process in the timeframe required by the law.

Larsen emphasized a “hybrid” approach included in proposed rules issued last week, which would allow states to launch some aspects of an exchange by the 2014 deadline while the federal government filled other functions of the exchange. Additionally, the proposed regulations would allow states to miss the 2014 deadline altogether and apply to establish an exchange in later years.