Health Exchange Decision Changed Again

By Ilyas Choudry, TMO

States now have until Dec. 14 to decide; Perry says Texas not setting up its own

Last Thursday was to have been the deadline for states to decide if they will set up health insurance exchanges as part of the Obama administration’s health reform law. However, the Obama administration, in response to a request in a letter from the Republican Governors Association (RGA), has once again extended the deadline. Now, according to the White House, that deadline will be Dec. 14.

The decision in Texas was made last June – and apparently hasn’t changed. The exchanges, which will offer more affordable health insurance plans for both individuals and small businesses as prescribed under the Affordable Care Act, are supposed to open for enrollment on Oct. 1, 2013. More than 20 million people are expected to use them.

Just days after President Barack Obama’s re-election, the U.S. Department of Health and Human Services (HHS) notified states that they would have more time to file their health insurance exchange plans. HHS Secretary Kathleen Sebelius originally set new deadlines for applications, saying states planning for a state-run exchange must send a letter of intent by today, Friday. Late Thursday that deadline was changed to Dec. 14.

Regardless of when the deadline is, don’t expect anyone from Gov. Rick Perry’s office to be rushing to the post office or clicking the “send” button on a computer at 11:59 p.m. on that date to beat a midnight deadline.

Perry sent a letter to Sebelius last July saying Texas would not create a state exchange. In the letter, the governor said that neither the proposed exchanges nor proposed Medicaid expansion “would result in better patient protection or in more affordable care.”

Sebelius got another letter from Perry yesterday before the second deadline extension, when the Texas governor told the HHS Secretary that the state of Texas would not participate. In his letter, Perry wrote that such an exchange would present “an unknown cost to Texas taxpayers.” He called the exchanges “a federally mandated exchange with rules dictated by Washington” and said it would not be “fiscally responsible to put hard-working Texans on the financial hook for an unknown amount of money to operate a system under rules that have not even been written.”

Several other Republican governors – from Florida, Louisiana, Kansas, South Carolina and Virginia – said they would not implement a state-based exchange either. Earlier this week deadlines were extended the first time by HHS. While Florida Gov. Rick Scott yesterday said he now wants to negotiate with the Obama administration over the law, Perry said of Texas’ refusal to set up an exchange, “Nothing changes from our perspective.”

The Republican Governor’s Association letter to President Barack Obama asked for a meeting to discuss his proposals for national health care. The letter, signed by RGA Chair Gov. Bob McDonnell of Virginia, stated that the time frame and many of the provisions necessary to ensure a health care workforce and infrastructure “are simply unworkable.”

McDonnell also stated in the RGA letter to the President, “In the near term, we need to better understand how the federal government will implement a federal exchange as it is clear most states will not be ready on their own.” He also said there is concern about “future cost shifting to states.”

If Texas does not create its own exchange, the first exchange in the state will be a federal one. The state could, however, apply for its own exchange for up to two years after the deadline. Already, nearly three-dozen states and the District of Columbia have been awarded grants to help develop their exchanges – more than $2 billion over the last two years. Six states received more than $100 million each.

States that choose to participate in a state-federal partnership exchange have until Feb. 15 to submit their blueprints to the administration. Otherwise, states are opting for a federal-run exchange. Among the states that are creating their own exchanges are New York, Maryland and California. As late as yesterday, Texas was joined by Nebraska in refusing to set up an exchange, as Nebraska Gov. Dave Heineman said “no” to the proposal.

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