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States Decline to Set Up Exchanges for Insurance

Posted Dec 02 2012 11:21am

President Obama has an interesting way of negotiating. Rather than trying to  compromise and meeting some of the needs of the opposition, he always plays a game of chicken at the last minute.

Most of his supposed innovations have failed because of this.

He has backed off many of his proposed innovations either because of resistance by opponents or because the innovation was impractical.

The CLASS ACT (Community Living Assistance Services and Supports) was abandoned by the administration because once it became apparent that providing long-term care would be impractical, unaffordable and impossible to execute.

The same realization is emerging for the formation of the health insurance exchanges (HIX) . Health insurance exchanges were supposed to be operational in every state on January 1, 2014.

The traditional media continues to play right into President Obama’s hands. It makes a battle between the good guys and the bad guys out of every issue  rather than presenting the facts about the issues.

President Obama and his team are always the good guys. All of the critical issues for success or failure of the health insurance exchanges have been left out of the public debate.

President Obama’s idealistic hope was that all the states would make their commitment to set up the exchanges. Many states have refused to set up the health exchanges. President Obama increased state subsidies for the exchanges without congressional approval to encourage states to join.

By August 2012 only 13 states agreed to set up their own state health insurance exchanges. As of the end of November 2012 only 17 states agreed to set up their own healthcare insurance exchanges.

The revised deadline of November 15, 2012 for signing up has been extended to December 15, 2012.

States wanting to pursue a "partnership exchange", a hybrid exchange to decrease costs to the states by increasing Federal Funding still have until Feb. 15, 2013 to submit a declaration letter and blueprint for its exchange. 

Federal officials have stated if states do not set up the exchanges the federal government will.

“The exchanges — online markets where consumers can shop for private insurance subsidized by the federal government — are a centerpiece of  President Obama ’s health care law .”

HHS was supposed to certify HIX blueprints for all 50 states by Jan. 1, 2013.  The states are supposed to be ready for open enrollment by Oct. 1, 2013 and operational on Jan. 1, 2014.  

As of November 19, 2012, seventeen states, NY, MA, RI, NH, DC, KY, DE, W VA, MS. NM, CO, CA. OR, NV, MN, WA, and HI have declared their intention to establish a State-based Exchange (SBE).

Federal regulations have not been released. I will bet some of above states will drop out when they will be able to calculate their costs.

The nineteen states that have definitely declined to participate in the health insurance exchanges at this point are TX, OK, KS, NB, ME, VT, SD, ND, AK WY, MT, VA, GA, AL, MO, SC, OH, IN, WI.

Most of these states realize the financial burden, administrative burden, and challenge to states rights Obamacare’s health Insurance exchanges will place on their states as they try desperately to balance their own budgets.

An additional five states, AR, NC, Il, MN, and ME are pursuing an ill defined  partnership plan offered by the Obama administration to set up a health insurance exchange.

Nine states are undecided but leading toward rejection.

A total of 28 states are leaning towaed total rejection of the health insurance exchange concept and 22 states are interested.

I am not a Rick Perry fan but sometimes he says some smart things.

" Neither a 'state' exchange nor the expansion of Medicaid under the Orwellian-named P.P.A.C.A. would result in better 'patient protection' or in more 'affordable care,'" Texas Gov. Rick Perry said in July in a  letter to Health and Human Services Secretary Kathleen Sebelius. "What they would do is make Texas a mere appendage of the federal government when it comes to health care."

The administration has published preliminary regulations. Even though the exchanges are supposed to be state run, the federal government is going to dictate the rules. The loss of state rule is making many state governors nervous.

 Gov. John R. Kasich of Ohio, a Republican, said Friday that his state “will not run an Obamacare health exchange, but will instead leave that to the federal government to do.”

“Based on the information we have,” Mr. Kasich said, “states do not have any flexibility to build and manage exchanges in ways that respond to unique needs of their citizens.”

Gov. Scott Walker of Wisconsin said , “under the law, Wisconsin taxpayers will not have meaningful control over the health care policies and services sold to Wisconsin residents.”

Gov. Nathan Deal of Georgia , a Republican said, “his state would not establish an exchange. He expressed concern about what he described as “the one-size-fits-all approach and high federal burden imposed on states.”

It will be interesting to see how President Obama is going to get around this problem. Especially when the last CBO estimate of the cost of Obamacare will be $2.5 trillion dollars over the next ten years rather than decreasing the cost of healthcare by $115 billion dollars over the next 10 as originally estimated.

This problem represents just a fraction of the problems health insurance exchanges are facing.

I will cover some of the other problems in my next blog. Stay tuned.

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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