States face another Affordable Care Act deadline Feb. 15 -- their last chance to work with the federal government in setting up new online health insurance marketplaces that open for business Oct. 1.
The Obama administration has given “conditional approval” to 17 states and the District of Columbia to run their own marketplaces, which will offer one-stop shopping for private insurance or Medicaid, the state-federal health insurance program for the poor. About 12 million people are expected to buy coverage through the Internet sites next year, with the number increasing to 29 million by 2021, according to consulting firm PriceWaterHouseCoopers.
About 20 states, most Republican-led, have said they will let the federal government run the marketplaces, also known as exchanges. And seven governors from Arkansas, Delaware, Illinois, Iowa, Michigan, New Hampshire and South Dakota have sought approval for the third option -- a partnership with the federal government. Three of those -- Arkansas, Delaware and Illinois -- have already received conditional approval. Feb. 15 is the last day for states to apply to be partners.
In a partnership, states would approve which plans can participate on the marketplace and handle consumer assistance duties such as setting up call centers to handle inquiries. The federal government would handle the more complex duties of running the website, marketing the site and determining the eligibility of millions of people for government subsidies which will make prices more affordable.
States that are still considering a partnership exchange include Florida, New Jersey, Tennessee and West Virginia.
Health & Human Services Secretary Kathleen Sebelius said this week no matter what governors decide, residents in every state will have a marketplace on Oct. 1, which will sell coverage to individuals and small employers. Those policies will take effect in January.
Consumers will generally see little difference in how the websites work regardless of who operates them, according to experts. Unlike buying insurance online today, the marketplaces will offer standardized policies so consumers can easily compare plans, something administration officials say should lead to more competitive pricing.
Obama administration officials have said they prefer states to run the marketplaces because they know their local communities and have longstanding relationships with key groups, such as insurers and insurance agents.
Most hospitals, doctors, insurers and other stakeholder groups favored state involvement where they thought they might have more sway. But most states opted against operating an exchange, citing worries about cost and lack of real autonomy or political opposition to the health law.
Nearly all states plan to finance their marketplaces with a tax or surcharge on premiums that insurers will pass on to policyholders.
It is unclear if every state that has applied to run a state exchange will get a green light. The administration rejected Mississippi’s bid last week after the governor said he would block the marketplace from connecting people to Medicaid.
Idaho has yet to start building its exchange as it waits for state lawmakers to pass legislation allowing it. Idaho is also the only state to win conditional approval without having yet hired an information technology vendor to start building its website. “It will require a significant and accelerated effort to meet all of the necessary deadlines before October open enrollment," said Carolyn Pearson, a director with consulting firm Avalere Health.
Utah also has expressed doubts about going ahead with its own exchange even though it has operated one just for small businesses since 2009.
Here is a breakdown of state actions.
States doing their own online marketplace:
California, Colorado, Connecticut, District of Columbia, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Utah, Vermont and Washington.
States doing a partnership with the federal government:
Arkansas, Delaware, Illinois, Iowa, Michigan, New Hampshire and South Dakota.
States defaulting to the federal exchange:
Alabama, Alaska, Arizona, Georgia, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, Virginia, Wisconsin and Wyoming.
Florida, New Jersey, Tennessee and West Virginia.
This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.