The Affordable Care Act stands. Now, states start scrambling.

June 29, 2012

(Don Hankins | Flickr)

With the Supreme Court ruling upholding the Affordable Care Act, states now have some certainty about what the next six months will look like: a mad scramble to meet looming deadlines.

The law requires each state to have a new health insurance marketplace where individuals can purchase coverage up and running by 2014. Creating that marketplace - or exchange - is a pretty big job. States have to build new technologies that can sort out who is eligible for what program, and they have to do it in real-time, presenting customers with the right options as if they were shopping on Amazon.com.

States have until 2014 to get this done. But they have only six months - until the end of this year - to show the Obama administration that they have made enough progress to launch on time. If they can't, the federal government will come in and take over the task for them.

Just one state so far has told the Obama administration that it will definitely be able to set up its own marketplace -- Hawaii. Everyone else is still laying groundwork. Thirty-three states have accepted multimillion-dollar grants to plan their exchanges. Applications for a fresh round of funding are due to HHS today.

"I think you have about 20 states right now that have a realistic chance of meeting these deadlines," says Joel Ario, managing director at Manatt Health Solutions. Up until last August, he worked for the Health and Human Services Department overseeing the health insurance exchanges.

That isn't what the federal government had hoped for: It wants to see all 50 states run their own health insurance exchanges. That would create more buy-in for the state and also relieve the federal government of a huge amount of work setting up these markets.

"At the end of the day, its going to be better to have state-based exchanges," Ario says. "If only because then the state has an ownership stake in making them work."

To that end, the Obama administration rolled out even more grants Friday, meant to entice states into participating. By the end of the year, we'll know a lot more about how many ultimately play ball.

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