HHS extends deadline to announce exchange plans

HHS Secretary Kathleen Sebelius said Thursday that states would have four more weeks to decide whether to operate their own health insurance exchanges under the healthcare reform law.

In a letter to Republican Govs. Bob McDonnell of Virginia and Bobby Jindal of Louisiana (PDF) and the Republican Governors Association, Sebelius said states could express their intent at the same time they submit a blueprint for how they would operate the exchange, which they must do by Dec. 14. Last week HHS said states would have to say by Nov. 16 if they intended to set up an exchange rather than have one operated by, or in partnership with, the federal government.

At least two Republican-led states have indicated they plan to pursue state-run health insurance exchanges in the lead-up to what they believed was a Friday deadline.

Officials in New Mexico and Mississippi plan to submit letters of intent to operate a health insurance marketplace, according to media reports. However, complications are possible in both states.

In the wake of President Barack Obama's re-election, New Mexico Gov. Susana Martinez plans to establish a state-run exchange through an executive order, according to local media reports. But Republicans in the state legislature said an exchange would require statutory authority and the state attorney general is reviewing the issue.

State laws vary on whether legislation is required for state-run exchanges. Twelve states and the District of Columbia have enacted authorizing legislation, according to the National Conference on State Legislatures, and four more states have done so through executive orders.

Similar authorizing complications could occur in Mississippi where the insurance commissioner reportedly decided to submit a letter of intent to launch on exchange to HHS. Commissioner Mike Chaney said he opposes the federal healthcare overhaul but prefers the state to operate an exchange to the federal government operating one. His submission was opposed fellow Republican Gov. Phil Bryant.

Republican governors in Indiana, Virginia, Louisiana, Alaska, Nebraska and Wyoming have all indicated they will not pursue state-run exchanges, according to local media reports. However, it remained unclear whether any of them would pursue partnership exchanges jointly run with the federal government. Sebelius last week extended the deadline for states to commit to those federal-state marketplaces to Feb. 15.

The Republican Governors Association wrote Sebelius this week to urge a further delay in the non-statutory exchange deadlines.

North Carolina Gov. Beverly Perdue, a Democrat, said Thursday that her state would operate a hybrid exchange in partnership with the federal government, the Associated Press reported.