Many States Not Prepared for Healthcare Law

By Sandhya Somashekhar for the Washington Post –

More than three dozen states could be unprepared or unwilling to set up the insurance marketplaces called for under the 2010 health-care law, leaving at least part of the task up to the federal government, according to a new report.

Thirteen states and the District of Columbia have formally expressed their intention to set up the marketplaces, which are known under the law as health insurance exchanges.

But many of the rest of the states are behind in their planning or have decided not to operate exchanges on their own, according to a report from the Health Research Institute, the research arm of PricewaterhouseCoopers’s health-care consulting business.

Even some of the 13 that plan to set up the exchanges might not be ready for enrollment by October 2013, the report said. If a state does not set up an exchange, the federal government will either partner with the state or be the sole operator in that state.

When the law passed, many experts predicted that the vast majority of states would set up their own exchanges. The exchanges are a critical piece of the health law, a resource aimed at helping millions of uninsured Americans find private plans, get government subsidies or gain access to Medicaid, the state-federal program for the poor and disabled.

The experts believed states would want to tailor the exchanges to their own populations. But the task has proved exceedingly complicated. Participating states must set up a call center as well as a Web site that allows people to easily find and understand health plans, in much the way that Orbitz and Travelocity help people find airline flights.

Moreover, many Republican-led states resisted the exchanges in the hope that the Supreme Court would strike the health law down this summer, or that Republican presidential candidate Mitt Romney would win the November election and repeal the law next year.

“We thought states would sit down and weigh the pros and cons of taking on this responsibility,” said Alan Weil, executive director of the National Academy of State Health Policy. Instead, “states are looking at this much more from a partisan lens and less through a strategic analysis of running an exchange.”

Some experts believe a larger number of states will eventually set up their own exchanges if President Obama is reelected. Their timetable is short, however, because the exchanges must be operating in time for open enrollment in October 2013.

States must declare their plans to the Department of Health and Human Services by Nov. 16. In addition to the 13 states that have expressed their intent to set up marketplaces, three states have decided to partner with the federal government in forming the exchanges. Eight have opted to leave the task exclusively to federal authorities.

If states do not set up exchanges, the health-care law requires the federal government to step in.

U.S. officials say that they will be ready no matter how many states go this route but that they still invite states to play some role in running the exchanges.

“We have worked closely with states to give them the flexibility they need to establish an exchange, and no matter what course states choose, consumers in every state will have access to an [exchange],” said Erin Shields Britt, a spokeswoman for HHS.