Health Insurance Exchanges and Deadlines Under the ACA: Part 1 of 2: What are the Choices?

November 27, 2012

Health insurance exchangesThe extension of deadlines for setting up Health Insurance Exchanges under the Affordable Care Act, most recently in a letter from HHS Secretary Kathleen Sebelius on Thursday, November 15, 2012, has put both the Exchanges and upcoming deadlines in focus.

The Affordable Care Act (“ACA” a/k/a “Obamacare”) provides for the 50 States and the District of Columbia to select one of three types of Health Insurance Exchange.  They are:  (1) a State-based Exchange, (2) a State Partnership Exchange, and (3) a Federally-facilitated Exchange, which is not really a State Exchange at all.  The State-based Exchange offers the highest level of State control over the Exchange, and the Partnership Exchange allows the State to control some aspects of the Exchange while the Federal Department of Health and Human Services (“HHS”) administers other parts of the Exchange.  See the Federal web site set up regarding the Affordable Care Act.  Each of these models offers multiple, flexible choices.  If a State elects not to operate any State-based Exchange at all, then in that event, under the ACA the   Secretary of HHS “will establish and operate a Federally-facilitated Exchange” for that particular State.  Blueprint for Approval of Affordable State-based and State Partnership Insurance Exchanges, August 14, 2012.  These choices are not set in concrete.  States can elect different models in and for following years.

Eighteen or slightly over one-third of the States plus the District of Columbia (35%) have established or elected to establish a State-based Exchange, and another 12% or 6 States were planning for a State Partnership Exchange, so that by Thanksgiving, 2012, 47% of the 50 States plus the District of Columbia have chosen one of the two types of Health Insurance Exchanges available for State participation under the Affordable Care Act.  See Kaiser State Health Facts on Health Insurance Exchanges at, “State Decisions For Creating Health Insurance Exchanges in 2014, As Of November 19, 2012.”  Other observers put the figures of participation even higher.

The remaining 27 States, or 53%, have announced as of this writing at Thanksgiving, 2012 that either they would not make a State Exchange of any kind or that they are planning or undecided about their choice of Health Insurance Exchange.

These numbers may be a little misleading.  Fifty (50) out of 51 jurisdictions have already asked for and received Federal planning grants.  Forty-nine (49) of these 51 jurisdictions have asked for and received a total of $2,045,600.55  from  the Federal Government toward building their Health Insurance Exchanges, as of  November 20, 2012.  See Total Health Insurance Exchange Grants, As Of FY 2012.”  (This figure includes $1 Million provided to Florida by the Federal Government in an Exchange planning grant, which Florida Governor Rick Scott gave back.)

In our next post, we will address the extended deadlines currently in effect for the States and the Federal Government to implement Health Insurance Exchanges.

To be continued …..