No rush on insurance exchanges expected in red states

In the aftermath of the U.S. Supreme Court ruling upholding the federal healthcare law, congressional Republicans generally expect Republican-led states to continue holding off implementation of the insurance exchanges required by the 2010 statute.

Some Republican governors had indicated they were waiting for the ruling before deciding whether to launch the insurance marketplaces required by the law. If states do not receive federal certification by the beginning of next year that they will have exchanges ready to launch by 2014, then the federal government will create an exchange in those states.

At least one federal official has indicated that up to 30 states could have been waiting for either the court ruling or the November election before deciding to proceed with an exchange. Among Republicans who believe states will continue to wait for the outcome of the November elections was Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee.

“I think they will be looking for what happens in the November elections, as well,” he said in an interview.

Rep. Michael Burgess (R-Texas) said states are still seeking clarity on key details of the exchanges before implementing them. His state will definitely not move this year to establish an exchange, he said, because its Legislature has already adjourned for the year.

Similarly, Rep. Phil Gingrey (R-Ga.) said he is confident his state will not implement an exchange. He also is hoping the law's maintenance-of-effort provision, which bars states from reducing their Medicaid roles, will be eliminated in the future.

Rep. Tim Murphy (R-Pa.) said he hoped Congress is able to eventually implement changes to several aspects of the exchanges before all states have to implement them.

“To the extent that the exchanges are giving people a side-by-side comparison of different health policies is certainly something that I would advocate,” Murphy said in an interview. “The trouble is, those side-by-side comparisons are all filled with mandates that the federal law says that every plan has to have.”

Senior Obama administration officials, meanwhile, said Thursday they are willing to work with states wherever they are in the process with regard to the exchanges. One official noted that some states are ahead of the curve, while other states require more assistance. Friday—June 29—marks the quarterly deadline for states to apply for establishment grants.

Last month, HHS announced that 34 states and Washington, D.C., have received establishment grants to help states build their exchanges. These grants include “level one” grants, which provide up to one year of funding to states that have made some progress under their exchange planning grant; and “level two” awards, which are designed to provide funding through Dec. 31, 2014, to applicants that are further along in their exchange planning.