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If state exchanges aren't ready, the feds will have a backup plan

Remarks are the first sign that HHS is not certain states will meet their deadlines

Topics: Information Technology

March 18, 2013

The Obama administration is developing contingency plans that would allow the federal government to step in and assume operational control of the 17 state-based exchanges if they are not ready to go by Oct. 1, a CMS official said last week.

  • Need a refresher on the state health exchanges? We've got you covered with a quick review of the ACA marketplaces, including when they're rolling out, how they work, and what it means for you.

Under the Affordable Care Act (ACA), states must create health insurance exchanges to provide more affordable coverage options to individuals and small businesses. States can operate their own exchange, ask the federal government to run an exchange for them, or partner with the government to operate an exchange. The ACA mandates that the federal government operate an exchange in any state that is unwilling or unable to create its own.

Beginning in January 2014, the government will run exchanges in 26 states, seven states will partner with the federal government, and 17 states and D.C. will run their own marketplaces.

Speaking on Thursday at an event organized by America's Health Insurance Plans, Gary Cohen—director of the Center for Consumer Information and Insurance Oversight—acknowledged that there is "some possibility" that some states that have obtained conditional approval to run their own exchange might not be ready by October, adding that a backup plan is essential if such a scenario does occur.

Cohen said, "I think it's only prudent to not assume everything is going to work perfectly on day one and to make sure that we've got plans in place to address things that may happen." He added that some of the main challenges states might face are developing information technology systems for enrolling eligible applicants, as well as ongoing legal and political challenges from ACA opponents.

In addition, states that received conditional approval for their exchanges and started their preparations later also will have larger challenges and less time to be ready by the deadline, Cohen noted. However, he said, "I'm absolutely confident that every state will have an exchange that will be functioning and ready."

According to CQ HealthBeat, Cohen's remarks represent the first time HHS leaders have "veered even slightly" from their assurance that the exchanges will meet their deadlines.

At the same event, Henry Chao—deputy chief information officer at CMS's Office of Information Services—said, "We are under 200 days from open enrollment, and I'm pretty nervous," but said the exchanges would be up and running by the deadline (Morgan, Reuters, 3/14; Norman, CQ HealthBeat, 3/14 [subscription required]).

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