Over the past two years, many Republican governors held off taking steps to create a health insurance exchange (HIX) in the hopes that Mitt Romney would win the 2012 presidential election and repeal the Affordable Care Act.
And now, some states, particularly those run by Republican governors, are faced with less time to make a big decision — though the federal government did extend the deadline for states to decide whether to establish and operate their own HIXs.
States have three options for an exchange, as dictated by the Affordable Care Act:States can run their own exchanges, with 100 percent funding from the federal government (though states will likely face costs in updating legacy systems to integrate with the exchange system);An exchange that is state-federal partnership can be established; orStates that choose not to participate in the development of an exchange will have an exchange established and run for them by the federal government.
And it seems the third option may be what will happen in several red states.
Some governors, like Maine Gov. Paul LePage, have completely checked out of the HIX discussion, refusing to participate in any way. “I’m not lifting a finger,” LePage told Bloomberg. LePage returned a $5.8 million federal grant that would have helped his state pay for setting up a partnership exchange.
Other Republican governors that have firmly opposed participation in the program include Florida’s Rick Scott, Louisiana’s Bobby Jindal, Kansas’ Sam Brownback, Texas’ Rick Perry, South Carolina’s Nikki Haley, Georgia’s Nathan Deal, Virginia’s Robert McDonnell, Alabama’s Robert Bentley, Nebraska’s Dave Heineman and Alaska’s Sean Parnell.
While some say that not participating in establishing and operating a HIX will rob states of the opportunity to negotiate the best rates with insurers, some Republicans have argued that they are not prepared to foot a large bill for a program they do not necessarily support. Now faced with the reality of four more years of an Obama administration, other Republican governors are working with the federal government’s deadline extensions to run their own exchange.
Enrollment in health-care plans is scheduled to begin in October 2013, as all Americans are required to be enrolled in a health-care plan by Jan. 1, 2014. But with some Republican leaders dragging their feet and the federal government seemingly willing to offer states flexibility, that timeline could change.
The deadline for states was extended in response to direct requests from some states that wanted more time, according to a spokesperson from the Centers for Medicare and Medicaid. “Our preference is for each state to establish its own exchange because a state-based exchange (SBE) provides states with the most amount of flexibility,” a spokesperson said via email. “There is no one-size-fits-all approach, and an SBE allows a state to structure its exchange in its own way that works for its citizens. For example, a state with its own exchange will be able to make needed changes to enrollment and eligibility, determine how to select plans to participate and how to subsequently manage those plans directly, and how best to educate consumers about the exchange.”
The deadline extensions are a further demonstration of the federal government’s intent to allow states to participate in not only the final rules of their exchanges, but also to be active participants in the whole process, said Gartner Research Director Rick Howard. While the practical effect of the deadline extension may not be to persuade stout opponents of the program to participate, it’s a “good-faith effort” by the federal government to encourage participation, he said.
Florida, Ohio and Missouri seem to be reconsidering some level of involvement in running their own program, Howard said, and Arizona, Utah and Pennsylvania may also find a way to meet the new deadlines. “I think that those governors who have resisted the exchange are doing so on the idea that they’ve seen some price tags that seem to be pretty expensive,” Howard said, adding that Republican governors may just be managing risk conservatively, and many of those now opposed to state-based exchanges may adopt an exchange once real-world models have been developed and demonstrated by other states.
Ultimately, Howard said, exchanges are the future, no matter who is in the White House. “You can wish away the Affordable Care Act, but that’s not going to change the underlying dynamics of the marketplace,” he said. “We’re seeing through merger and acquisitions activities that that’s being borne out. Health plans are looking to survive in a much more consumer-oriented marketplace that they just haven’t had to face before.”
Commercial health care was already headed toward a side-by-side comparison model because the advancement of technology has led consumers to expect more options while shopping, he said, and the Obama administration is trying to bring government up to speed with the marketplace.
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