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ARC: WHAT COMPANIES NEED TO KNOW AS THEY ASSESS MEDICAL COVERAGE OPTIONS

HHS to run health care exchanges in more than half of states in 2014

Kathleen Sebelius HHS
Photo by Bloomberg Kathleen Sebelius, secretary of the U.S. Department of Health and Human Services.

The federal government will be running health insurance exchanges in more than half of the states, including several of the biggest states — such as Florida, Texas and Pennsylvania — when a key provision of the 2010 health care reform law kicks in next year.

In all, the U.S. Department of Health and Human Services will be running exchanges in 27 states. Sixteen states, including California and New York, as well as the District of Columbia, have received conditional approval to run their own exchanges.

A 17th state — Utah — also received conditional approval, but state officials said they intend to let HHS run an exchange for individuals, while Utah will continue its existing exchange, known as Avenue H, for small employers.

Three states — Arkansas, Delaware and Illinois — have received conditional approval to run exchanges in partnership with HHS, while four more states this week submitted partnership agreements.

According to a Congressional Budget Office estimate, in 2014, about 6 million uninsured Americans will use premium subsidies created by the health care reform law to buy coverage in 2014 from insurers participating in the exchanges.

States may take control in the future

While few if any experts or lawmakers would have predicted at the time Congress passed the Patient Protection and Affordable Care Act that the federal government would be running so many exchanges, more states could decide in the coming years to take over running exchanges.

Some states, for example, couldn't get an exchange “up and running” in time for open enrollment, which starts Oct. 1, 2013, “and did not want that responsibility right now,” said Caroline Pearson, a director at health care consultant Avalere Health L.L.C. in Washington.

“We could see more states assume” exchange sponsorship in the future, she said.

States are required to give HHS 13 month notice before the start of a year on whether they intend to offer an exchange.

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