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Feds give states a last-minute break on insurance marketplaces

States got a last-minute extension late Thursday of a deadline to decide whether they’ll build their own health insurance marketplaces, or let the federal government do it for them.

Republican governors had been complaining about the Nov. 16 deadline to file their formal decision with the Health and Human Services Department, mostly because HHS has not yet told them what a federal exchange would look like.

HHS secretary Kathleen Sebelius gave in at almost the last moment, extending the deadline to Dec. 14.

“While receiving a letter of intent now will help us assist states in finalizing their application, a state may submit both a letter of intent and an application to operate its own exchange by December 14,” Sebelius wrote in a letter to the Republican Governors Association.

It’s the second time in a week that Sebelius let the governors slide. Last Friday, HHS said the states could have nearly a month extra to submit plans of what their exchanges would look like, if they decided to set up their own. She gave them until Feb. 15 to detail plans if they wanted to partner with the federal government to build an exchange.

The 2010 Affordable Care Act aims to get more people covered by health insurance, so they can get medical care when they need it, and so they get care earlier, before easy-to-treat conditions like high blood pressure can cause expensive strokes or heart attacks. One way to do this is by setting up online marketplaces called exchanges to help people to buy insurance.

They’re supposed to provide a side-by-side comparison on price, what’s covered and how much you might have to pay out of pocket for a doctor’s visit. They’ll also be a route for people to get a little extra cash from the federal government to buy insurance; the health care law provides for a generous federal subsidy for many, if not most, buyers.

However, many governors have balked at doing this and most states were procrastinating. Some were gambling that the Supreme Court would strike down the health reform law in June and when it didn’t, they waited to see if Republicans took the White House and Senate in the Nov. 6 election.

Now they will have to decide, but HHS has also taken some time in publishing rules many governors say they need to see before they decide whether to take on the job of running an exchange.

Virginia Gov. Bob McDonnell and Louisiana Gov. Bobby Jindal wrote to President Barack Obama, asking him to extend the Nov. 16 deadline. 

Jindal and McDonnell are among the governors who have said they won’t set up exchanges. Nebraska Gov. Dave Heineman joined the group on Thursday.

"The reality is that the federal health care law is being totally dictated and totally controlled by the federal government," Heineman told a news conference.

South Carolina’s Nikki Haley repeated her decision to opt out of running an exchange Thursday. Other Republicans who have said no include Texas Gov. Rick Perry, Alaska Gov. Sean Parnell and Kansas Gov. Sam Brownback.

But Mississippi has said it will set up an exchange and Florida Gov. Rick Scott, who led one of the major lawsuits trying to overturn the Affordable Care Act, now says he’ll try to do so in his state, also. New Mexico’s Republican Gov. Susana Martinez had been working already to set one up. Heavily Democratic states such as California and Connecticut have already begun work on their exchanges and Colorado says it will, too.

Sebelius said in her letter she would provide more information soon.

“Additional guidance will be released in the coming days and weeks,” she wrote. “We are confident governors will have enough time to decide whether they want to establish an exchange, work in partnership with the federal government or have a federally facilitated exchange in their state.”

The exchanges must, under law, be up and running by January 2014. Open enrollment -- when people get to have a peek at what is on offer and start signing up -- is supposed to start by October of next year.

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