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Idaho, Utah, N.M. Running Out Of Time To Set Up State Exchanges

Three western states which had gotten tentative go-aheads to run their own online health insurance websites — Utah, Idaho and New Mexico — are running out of time to be ready for an Oct. 1  launch and experts doubt they will get green lights from the federal government.

“We are not seeing enough progress that these states can easily get to final approval,” said Caroline Pearson, vice president of consulting firm Avalere Health.

If the states fall short, it means the federal government would be in charge of running an insurance website for 36 states, far more than imagined when the federal health law known as Obamacare passed.

Several million people are expected to start using the online websites to purchase individual health insurance and determine if they are eligible for government subsidies to help buy private coverage or Medicaid, the state-federal health program for poor. Open enrollment is slated to begin in October, with coverage taking effect Jan. 1.

The three states were among 17 states and the District of Columbia that won conditional approval Jan. 3 from the U.S. Department of Health and Human Services.

Exchange watchers say it’s increasingly likely the three states will partner with the federal government on the marketplaces, also known as exchanges, or default to federally run exchanges. HHS said that state residents will have access to the marketplaces regardless of who runs it.

State lawmakers in Idaho and New Mexico have yet to approve legislation permitting the creation of a state exchange, and neither state has hired a vendor to build its website. Both steps were required for final federal approval.

Meanwhile, Utah officials told HHS last month that they do not want to offer individual health insurance in their marketplace— a prerequisite for federal approval. Instead, the state wants to continue its existing marketplace which sells coverage only to small employers.

Health insurers in Utah and New Mexico – which must begin submitting their proposed benefit plans for 2014 — say they will be ready regardless of who runs the websites. Blue Cross and Blue Shield of New Mexico spokeswoman Becky Kenny said the insurer favors a state-based exchange, but will be ready either way.

“It’s getting damned late,” Jay Angoff, who was in charge of developing the websites for HHS and is now a partner at the Washington, D.C. law firm Mehri & Skalet. Some states are running behind because state officials “thought the deadlines were forever extendable,” he said.

The Idaho legislature is scheduled to finish its annual session this month. New Mexico’s legislature finishes up next week.

Seven states have been approved to do a partnership exchange with the federal government, including four given the go-ahead Thursday: Iowa, Michigan, New Hampshire and West Virginia. The rest of the states will rely on a website run by HHS.