Federal government to run insurance exchanges in 26 states

February 15, 2013

Florida, New Jersey and Tennessee will not partner with the federal government to create the online insurance marketplaces required under President Obama’s health-care law, the states’ governors announced Friday, ending months of speculation and starting a new chapter in the implementation of the law.

The exchanges in those states — and others that have declined to set up their own exchanges or partner with the federal government — will be run by federal officials, at least through 2014.

Republicans Rick Scott of Florida and Chris Christie of New Jersey have been vocal critics of the law. They had said previously that their states would not participate in the creation of the exchanges, a key part of the law meant to help individuals and small businesses find affordable coverage.

But they were among several Republican governors who had come under enormous pressure from advocates in their states to at least partially participate — by helping to select the insurance plans included in the exchanges and spearheading some outreach efforts to encourage enrollment. The deadline to enter into such a partnership with the Department of Health and Human Services was Friday.

Tennessee Gov. Bill Haslam (R) also informed HHS on Friday that his state would not help set up an exchange.

A Scott spokeswoman said the Florida governor did not have enough information to make a decision about running an exchange. In a statement, Christie said the federal government was best equipped to run the exchange, calling it the best option “for the residents of New Jersey, and the businesses that will carry the costs of this new program.”

New Jersey advocates of the law expressed disappointment in Christie’s decision but said this is in some ways a better outcome.

“All along, Governor Christie has been a barrier to implementing health reform,” said Dena Mottola Jaborska, director of organizing for New Jersey Citizen Action, a coalition of nonprofits that supports the law. “We’re perfectly happy for the federal government to take the lead on this because we know they will do everything in its power to make it successful.”

Friday’s deadline marks the end of a period of uncertainty surrounding the Affordable Care Act. Since the law’s passage in 2010, no one knew if the states would take the lead in setting up the exchanges or if the federal government would end up shouldering most of that work.

When it became apparent that a large number of states would decline to set up their own exchanges, federal health officials devised a compromise — partnerships that could be run with the federal government.

According to the nonpartisan Kaiser Family Foundation, as of now, 17 states and the District have said they are planning on running their own exchanges; 26 states are defaulting to the federal government, and seven will jointly run the exchanges with the federal government.

Those decisions clarify the scope of the federal government’s work in advance of Oct. 1, when the exchanges will begin enrolling people for coverage beginning in January.

Sandhya Somashekhar is a health reporter for the Washington Post.
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