States Want Feds to Move Faster on ACA Rules

Although the Patient Protection and Affordable Care Act’s (ACA) major provisions don’t go into effect until 2014, states and insurers must be prepared to enroll some 32 million Americans who currently lack insurance coverage into Medicaid or private insurance programs.  According to Kaiser Health News, the fly in the ointment is that to successfully unveil their individual programs in just two years, the states must make important crucial decisions and take actions this year.

It will be difficult for many states to meet fast-approaching deadlines, and some may not make it, said Brett Graham, managing director at Leavitt Partners, a consulting firm.  Two years is surprisingly brief and many states need information from the federal government detailing the various insurance exchange options and precisely which benefits must be included in health plans.  Complicating the situation is the fact that states are competing for a limited pool of information technology vendors to give them the help they need.  “It’s a pressure cooker,” said Graham. States are “in a position where they have to act with imperfect information.”

Next New Year’s Day, the Department of Health and Human Services (HHS) will certify which states are ready to run their own exchanges.  To earn certification, a state must put in place laws to fund the exchanges’ continuing operations.  While the federal government is providing financial help up front for the creation of exchanges, states will assume the cost once they are underway.  HHS can issue a conditional certification for those states that are making progress but need more time.

Only 14 states and the District of Columbia have made significant legislative progress toward creating exchanges, according to a Robert Wood Johnson Foundation report prepared by the Urban Institute. The study’s authors reach the conclusion that because of the ACA, the percentage of the population that is uninsured will decline in all 50 states and Washington, D.C.

While some states are aggressively moving forward, “at the other end are states that say, ‘no way, no how, we’re not doing it.’  Montana, Texas, Louisiana, Florida, they are not going to build it and they’re playing a game of chicken,” said Graham.  “They’re waiting for the Supreme Court,” hoping it will declare the ACA unconstitutional in June.

The majority of states cannot make up their minds about whether to build their own exchanges and or participate in the proposed federal model. It’s ironic that some states that are participating in the Supreme Court challenge have taken action: Colorado, Washington and Nevada have set up exchanges.

According to the Robert Wood Johnson/Urban Institute report, “Without action by these states, their populations will still benefit from health reform through the expansion of Medicaid/CHIP, but will have to rely on the federal government to create exchanges, as called for under the ACA.  This creation will be dependent on adequate federal resources and political support.”

According to the Robert Wood Johnson Foundation and the Urban Institute, 15 states have made “little or no progress” implementing insurance exchanges where individuals and small businesses can buy private insurance.  The states that haven’t started working on creating exchanges are among the states with the most residents eligible for federal subsidies to help buy insurance.  According to the analysis, the federal government has the ability to establish and run a substitute in any state that does not establish its own exchange.

Creating a full or partial federal exchange also could be a problem, although some healthcare analysts are unsure whether it will be any easier for the federal government.  It faces the same brief timeline as the states.  While Obama administration officials say they have the money to fund exchanges, many healthcare analysts aren’t so certain.  Most state legislatures will adjourn for the year by March or April — before the Supreme Court hands down its ruling — according to the National Conference of State Legislatures.  Special sessions after the ruling would be virtually impossible in an election year.

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