States' insurance marketplace application deadline moved to Dec. 14

States won't have to reveal their plans for establishing a health insurance exchange for another month, thanks to a reprieve granted by the Department of Health & Human Services (HHS).

[See also: Insurance exchange establishment grants flow to 8 states]

The original deadline for states to submit their blueprint and a declaration letter to establish a state-based exchange was Nov. 16.

Last week, HHS Secretary Kathleen Sebelius explained in a letter that states could delay assembling and sending in their documentation until Dec. 14 -- but they still had to at least notify HHS of their decision on a state-based exchange by Nov. 16.

On the eve of that deadline, Nov. 15, Sebelius sent a letter to the Republican Governors Association, in which she offered more decision-making time.

The extension delays accommodate primarily Republican governors, who were waiting until the Nov. 6 election outcome to decide whether to move ahead on the exchanges and other features of the health reform law.

Originally, if states did not meet the Nov. 16 deadline, the federal government would proceed to set up an exchange for them. HHS wants to be sure that the exchanges can be ready to start accepting open enrollment in October 2013 and start operations Jan. 1, 2014.

The latest letter responds to a request from Republican Governors Association leaders Virginia Gov. Bob McDonnell and Louisiana Gov. Bobby Jindal for more time to declare whether states will decide to run a state-based exchange.

“While receiving a letter of intent now will help us assist states in finalizing their application, a state may submit both a letter of intent and an application to operate its own exchange by December 14,” Sebelius said. 

HHS will accept plans from states that have decided to establish a state-federal partnership exchange by Feb. 15, 2013. States will also be able to apply to run exchanges in future.

“We are confident governors will have enough time to decide whether they want to establish an exchange, work in partnership with the federal government or have a federally facilitated exchange in their state,” Sebelius said.

Sebelius commented that HHS is “committed to providing states with the flexibility, resources, and time they need to deliver the benefits of the healthcare law to the American people.”

To date, 17 states and the District of Columbia have decided to build their own exchanges. Five states — Nebraska, South Carolina, Kansas, Alabama and Florida — have said the federal government can build their exchanges.

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