WASHINGTON — Governors in 18 of the 50 U.S. states agreed to build health-insurance exchanges, a final tally that leaves the federal government with the duty of running marketplaces for the majority of the nation through 2014.
Idaho, Nevada and Utah were among the states that submitted blueprint applications to President Barack Obama’s administration by the Friday deadline to create exchanges for residents to shop for insurance as part of the Patient Protection and Affordable Care Act, the Department of Health and Human Services said Monday. Governors who opted out said they opposed the federal regulations they would have to obey and long-term costs they would have to bear.
The law still lets a governor take over the federal exchange for his state any year after 2014, allowing him “to watch this without taking a great political risk,” said Robert Blendon, a health-policy professor at the Harvard School of Public Health in Boston.
“If these things are working and people who favored them do well in the 2014 election, I think these governors will just discover it’s worth having,” Blendon said in an interview.
The state exchanges sit at the heart of the law’s mandate to expand medical coverage to as many as 30 million people.The number of states opting out gives the Obama administration an opportunity to ensure some consistency nationally in how the exchanges are structured, said Dan Mendelson, chief executive officer of Washington-based consultant Avalere Health.
“From that perspective, they see that as a positive,” he said.
The 18 states participating are: California, Colorado, Connecticut, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Utah, and Washington, according to a blog post by the health agency. Washington, D.C., also is building an exchange.
Four states - Delaware, Illinois, Iowa and North Carolina - plan to contribute some services to a federally built exchange, Gary Cohen, who directs the U.S. Center for Consumer Information and Insurance Oversight, said last week. Those states may take on functions such as plan selection and customer assistance, while the federal government builds the websites and other infrastructure.
Under the law, the exchanges are designed to allow consumers who don’t have medical coverage through their jobs beginning in 2014 to easily compare health plans, and then buy coverage online or by phone. The U.S. is subsidizing the cost for those who can’t afford coverage.
States still have to come up with their own money to run the marketplaces. Nebraska Gov. Dave Heineman, a Republican, said it would cost about $81 million a year to run an exchange while the federal government could do the same job for about 27 percent of that amount.
Connecticut anticipates a cost of about $30 million a year, said Kevin Counihan, the chief executive officer of the Connecticut Health Insurance Exchange.
Front Section, Pages 2 on 12/18/2012