The Obama administration will allow states additional time to plan health insurance exchanges, giving hurried officials more breathing room to set up the marketplaces at the heart of the Affordable Care Act.
States now have an extra month to send the federal government “blueprints” for how they will have the health exchange up and running by 2014, according to a letter Health and Human Services Secretary Kathleen Sebelius sent to governors Friday. They must still inform the Obama administration whether they plan to set up an exchange by the original deadline of Nov. 16. Planning documents must follow by Dec. 14.
Many states have already decided they will not build the insurance marketplaces, leaving the task to the federal government.
The governors of Florida, Virginia and Kansas announced Thursday they would take this route. As many as 17 states are expected to have the federal government run their exchanges, according to an analysis from consulting firm Avalere Health.
“It would be very hard at this point to start from scratch,” Avalere President Dan Mendelson said of states that have waited until the last minute to start planning. “I’m not going to say it’s impossible, but it would be unlikely.”
Sebelius wrote to governors that the agency had “heard from many states that additional time would allow you to submit a more comprehensive, complete Blueprint application for your Exchange.”
“We are committed to providing you with the flexibility, resources, and technical assistance necessary to help you achieve successful implementation of your state’s Exchange,” she wrote.
States also have the option of pursuing a “partnership” exchange. Under that model, the state and federal governments would each take partial responsibility for running parts of the insurance marketplace.
States pursuing that model must notify the federal government in just over three months, by Feb. 15.
The Obama administration must certify that all states planning to administer their own exchanges have made sufficient progress by Jan. 1. Next October, the marketplaces will need to launch for open-enrollment periods.
Many Republican governors held off health exchange planning until after the election, citing the uncertainty surrounding the law’s future and the possibility of repeal.
Now that President Obama’s reelection has secured the law’s future, it’s not clear whether those states have time to catch up.
“If states don’t make this decision in the next 15 to 30 days, it’s going to be really hard to catch up,” said Sam Gibbs, senior vice president of sales at eHealthInsurance, which is helping states build insurance exchanges. “That’s why Sebelius is saying, ‘You can give me your plans later, but I still need to know which direction you’re going.’ ”
The extended deadlines will not affect the overall implementation timeline: Health insurance exchanges are still slated to launch at the start of 2014.
You can read Sebelius's full letter to the governors below.