Wednesday, 5 December 2012

ObamaCare: 21 States Reject Exchanges On Cost, Rules


obamacare ObamaCare's subsidized insurance exchanges are supposed to be up and running in little more than a year, putting a key piece of the federal health care law into action.
But it's unclear that will happen, especially with a growing number of states saying they don't want the cost and regulatory headaches.
The exchanges are where consumers without employer-based coverage will shop for insurance under ObamaCare and receive a tax credit toward its purchase if they are eligible. But 21 states have expressly declined to set up their own exchanges, with nine others still undecided ahead of the Dec. 14 deadline.
We Won't Build That
The more states that decline to set up a state-run exchange, the bigger the task that will fall to the federal government, which must set up and run insurance marketplaces in their place under ObamaCare. That could prove a difficult mandate given that all exchanges are supposed to be operational by Jan. 1, 2014.
State-run exchanges — within still-unclear federal mandates — could determine plan benefits, determine eligibility and handle enrollment. But many states — mostly with Republican governors — say creating and running their own exchanges offers heavy costs and responsibilities but little autonomy or clarity.
Setting up exchanges means states co-own ObamaCare, for good or ill. When problems develop, state officials will take some of the heat. But Washington will be fully responsible for federal exchanges.
The latest to decline are Arizona and Michigan.
Arizona will join 17 other states that have declined and will likely leave it to the federal government to create and run their exchanges. They still have until Feb. 15, 2013, to decide between a federal exchange or doing a "state-federal partnership" exchange.
Michigan joins Ohio and Arkansas in declining a state-based exchange but choosing the partnership route. Under this type of exchange, states can oversee insurance plans and assist consumers, but the federal government will handle duties such as enrollment and determining eligibility. States will also have the option to eventually transition to a state exchange.
Delaware, Illinois and North Carolina also have opted for partnerships but did not expressly decline establishing state exchanges.
Seventeen states have declared their intent to establish a state exchange, though at least one — Iowa — may back out.
Costs, control and regulatory uncertainty are the common concerns among states that have declined to set up a state exchange.
Cost was mentioned in the letters or press statements of 14 governors and was the reason the GOP-controlled legislatures of Arkansas and Michigan opposed a state exchange.

Read More At IBD: http://news.investors.com/120412-635663-many-states-resist-lead-role-running-insurance-markets.aspx#ixzz2EDMfM8Y2

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