Deadline Extended For Health Insurance Exchanges

Friday was supposed to be the deadline for a key part of the health care law: states were to tell the federal government about their progress on building a state exchange. But the deadline has been extended for the second time in a week. States now have until Dec. 14.

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LINDA WERTHEIMER, HOST:

Today was supposed to be the deadline for states to say if they were going to establish their own health exchanges under the federal Affordable Care Act. Those are the new marketplaces where individuals and small businesses will be able to shop for insurance and get help paying for it under the federal law. But last night federal officials decided to give states an additional month to decide whether they want to set up the exchanges themselves or let the federal government do it for them. Joining us here in the studio is NPR's health policy correspondent, Julie Rovner, who's been following this story. Hi Julie.

JULIE ROVNER, BYLINE: Good morning.

WERTHEIMER: So what happened here? Why did they need the extension? Why did they give it?

ROVNER: Well this was actually the second extension in a week. Now, let's put this in some time perspective. These exchanges are the way individuals and small businesses are going to shop for and buy their health insurance starting in January 2014. So about 13 months from now.

But they really have to be up and ready to roll next October 1st, or just under 11 months from now, because that will be the first open enrollment season under the new law. Now, the law originally set today as the deadline for states to say whether they were going to set up their own exchange, or let the federal government run the exchange in their state.

And if states were going to do it themselves, they were supposed to say exactly what they were planning to do. But a lot of states were, kind of, dragging their feet. First they were waiting for the Supreme Court to rule last summer, then they were waiting to see what happened with the election. And then they complained that they weren't ready.

So last week federal officials extended that timeline somewhat. All states had to say today was yes or no if they wanted to do the exchange themselves. The actual plans could wait until later. Now with the change last night, they said even that decision can wait until next month.

And states can wait until as late as next February if they want to run an exchange in partnership with the federal government.

WERTHEIMER: But this is complicated, and so therefore, however much time they have it's probably not enough time.

ROVNER: That's right and, you know, I think the federal government had hoped that most states would be opting to run their own exchanges. And that's definitely not what seems to be happening. As of late yesterday, only 16 states and the District of Columbia have said they're definitely moving forward on their own.

We've seen a number of governors, this week, mostly Republican, who still say they want no part of the federal health law. That includes Texas Republican Rick Perry, South Carolina Republican Nikki Haley, and Alabama Republican Robert Bentley. They say states won't have enough flexibility and are simply doing the federal government's bidding as part of a government healthcare takeover.

But we are seeing a few governors who may be changing their tune. Florida Republican Rick Scott, most notably, who has been one of the law's most outspoken opponents, just saw his state vote for President Obama's reelection and he's up for reelection himself in two years. This week he went from just say no to maybe we should find a way to get to yes when it comes to accepting federal funding for the law.

WERTHEIMER: Now, you were part of a chat on Twitter yesterday. What kinds of questions came up there?

ROVNER: Well, mostly they were kind of operational questions about how and even whether this will all work. One big question that came up repeatedly is whether states can decide to run their state's exchange later if they let the federal government set it up now. The answer to that is yes.

They can let the federal government start off running the exchange, then take it over sometime in the future or vice versa. So I think a lot of states may hang back at first and just see how things go with the law.

WERTHEIMER: So do you think people were nervous about the possibility that they might not be able to get what they want? Or that the state was not going to work with them on what they want? I mean, what was the biggest concern about health exchanges?

ROVNER: I think the biggest concern right now is that they just won't be ready in time. You know, these exchanges are really the linchpin of the entire health law. They have to be user-friendly and help people through various choices of really finding a health plan. They have to help people know if they are eligible for financial help paying for premiums.

And remember, lots of people will be eligible for help. Subsidies are available for people with incomes up to four times the poverty level. That's over $90,000 for a family of four. And if those people actually qualify for Medicaid, if they have low incomes, the exchanges will have to direct them there.

That's going to take a lot of data matching and software building and call centers and getting insurance plans approved and certified, and there's just not a lot of time left to do it. So I think that's the big concern right now for both the states and the federal government. Particularly if the federal government is going to be putting together many more exchanges than it originally anticipated.

WERTHEIMER: Julie, thank you very much.

ROVNER: Thank you.

WERTHEIMER: NPR's Julie Rovner.

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