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June 15, 2015 01:00 AM

HHS approves three state-based exchanges ahead of King decision

Bob Herman
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    AP
    Pennsylvania Gov. Tom Wolf won approval from HHS for the state to take over control of its insurance exchange.

    The Obama administration has given the go-ahead to Arkansas, Delaware and Pennsylvania to switch from federally facilitated health insurance marketplaces to state-based ones.

    The approvals come right before the U.S. Supreme Court will hand down a decision that could dramatically alter the course of the exchanges. Justices are expected to rule by the end of the month whether premium subsidies are legal in states that rely on HHS to operate their exchange. Conservative plaintiffs in King v. Burwell have argued the Affordable Care Act only allows the subsidies, known as premium tax credits, to be issued through exchanges established and operated by states.

    Delaware (PDF) and Pennsylvania (PDF) received approval to be state-based exchanges for 2016 for both the individual and small-group markets. Arkansas (PDF) will be able to establish a state-based exchange for small groups in 2016 and individual consumers in 2017, according to letters from HHS Secretary Sylvia Mathews Burwell to the three state governors.

    With Delaware and Pennsylvania becoming state exchanges by next year, that means 15 states and the District of Columbia will have state-based exchanges. The remaining 35 still have some type of support from the federal government. Arkansas' exchange would change in 2017, just as it had planned previously. The fates surrounding Nevada, New Mexico and Oregon are still unclear. HHS categorizes their exchanges as state-based although they still use the HealthCare.gov platform to sign up enrollees for health coverage.

    Switching to a state-based exchange is considered to be one of the only ways to keep premium subsidies flowing to consumers in the event the Supreme Court rules against the Obama administration. Modern Healthcare previously reported that Delaware and Pennsylvania were likely to set up their own exchanges, and Arkansas was trying.

    Many other states relying on the federal government are unlikely to change their individual marketplaces due to politics, legislative schedules, costs and other logistics.

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        • Diversity in Healthcare
          • - Luminaries
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          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
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        • ESG: The Implementation Imperative Summit
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        • Social Determinants of Health Symposium
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        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
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