Feds give until October 2013 to create exchange, not January 2013

Feds give until October 2013 to create exchange, not January 2013

by
Dustin Hurst
January 27, 2012
Dustin Hurst
Author Image
January 27, 2012

At a reporter's breakfast Wednesday, Gov. Butch Otter said that it's likely Idaho won't have enough time to create and implement its own state-based health insurance exchange program.

"The chances are very good that we are not going to have a state-based exchange," he said. “Quite frankly, the clock is running.” Otter says that the Jan. 1, 2013, deadline for federal exchange certification is coming quickly when looking at the amount of work required for the project.

However, there are questions about how long Idaho has if state lawmakers give the go-ahead on the project. While there is, indeed, a deadline for the state to meet next January, the exchange doesn’t have to be fully operational at that time.

Federal certification is the process the U.S. Department of Health and Human Services (HHS) is using to decide if it needs to step in and create an exchange for a state. Applications for certification can be submitted as early as October and HHS will make its final determination on each state’s situation by Jan. 1, 2013.

Certification does not, however, mean Idaho will have a functioning insurance exchange. That will come much later in the year.

Healthcare.gov, an HHS website dedicated to providing information about health reforms, says that the Jan. 1, 2013, date is simply for submitting exchange plans for federal approval. “Exchange plans must be approved by HHS no later than January 1, 2013,” says the site. “The proposed rule allows for conditional approval if the State is advanced in its preparation but cannot demonstrate complete readiness by the January 1, 2013 date.”

On July 15, 2011, HHS outlined the functions and details of the exchanges, including the date by which they must be operational. In Subpart B of that document, the feds say states have until Oct. 1, 2013, to get their programs up and running. “We believe that ‘fully operational’ means that an exchange is capable of beginning operations by October 1, 2013, to support the initial open enrollment period,” the document states.

Part of the certification is determining if state will be able to produce a working exchange by Oct. 1, 2013.

The deadlines set forth by HHS, however, might be flexible. HHS says via the Healthcare.gov site that states willing, but not yet able to produce working exchanges by the beginning of 2014, may get more time. “The proposed rule also allows States that are not ready for 2014 to apply to operate the exchange for 2015 or any subsequent year,” the site says. “HHS will continue working with states to support their progress.”

Looking at the Jan. 1, 2013, certification deadline, Idaho Department of Health and Welfare director Dick Armstrong petitioned HHS for a waiver last year on exchange creation and asked the agency to push the process back one year. “We have assessed the complexities of the federal requirement and find the current timeline to be unreasonable and unrealistic,” Armstrong wrote.

HHS has not responded to the request.

Lawmakers have yet to take up the exchange issue this year. An interim health care task force approved a structural plan for the program, but that has no legal authority.

The federal government granted Idaho $20.9 million to build the first phase of the exchange. Otter, in applying for the funds, said he asked for the money to keep Idaho’s options open and that lawmakers can return the dollars if that’s their wish.

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