COLUMBIA — The deadline to apply for a state health insurance exchange is less than a month away, but many states have made limited progress in planning and implementing the online marketplaces mandated by the 2010 federal health care law.
These Internet exchanges, which allow individuals and small businesses to compare the benefits, prices, quality and services of health care plans, are meant to encourage competition among insurers. Supporters of the health care law say this will lead to lower premiums.
If a state chooses not to run its own exchange, the law mandates that the federal government will step in and establish one for it.
In Missouri, Proposition E, which is on Tuesday's ballot, would amend state law to prohibit the governor or a state agency from establishing an exchange without the consent of voters or state legislators.
Missouri has historically opposed many components of the Affordable Care Act. In 2010, residents voted to reject the federal insurance mandate. Exchange legislation failed in the 2011 and 2012 sessions of the state legislature.
Elsewhere, the response to the Affordable Care Act’s exchange provision has varied. Although some states have already taken steps to create exchanges, others have had exchange-related legislation fail or have stated that they will not establish state-run exchanges.
States wishing to set up their own exchanges have little time to act; the deadline to submit an application to the U.S. Department of Health and Human Services is Nov. 16, and all state-operated exchanges must be fully functional by Oct. 1, 2013.
Exchanges in operation
In 2006, former Massachusetts Gov. Mitt Romney created the first state-operated exchange: the Commonwealth Health Insurance Connector Authority, an independent state agency governed by an 11-member board. The exchange offers two programs: Commonwealth Care, which is aimed toward low-income adults who require subsidized health care, and Commonwealth Choice, which is aimed at everyone else.
Stephanie Nichols, the Health Connector’s communications director, said eight insurance carriers participate in Commonwealth Choice, and five participate in Commonwealth Care, resulting in a combined total of 99 health care plans.
“People can browse through the health plans available to them, and then decide based on a variety of benefits — among them deductibles, out-of-pocket costs, co-pays, premium prices — which plan is best for them," Nichols said.
Nichols said 439,000 Massachusetts residents who were previously uninsured acquired insurance after the state health care reform. About 98 percent of the state's population is insured, including nearly 100 percent of children and seniors, she said.
Nichols said the Health Connector is funded by a combination of earned income, state funding and federal grants. In 2012, the exchange received about $25.6 million from the state, $6.3 million in earned income from its carriers and $1 million from the federal government.
Nichols said independent polls indicate that between 69 and 75 percent of Massachusetts residents support the state health care reform.
Utah legislators created Avenue H in 2009. That exchange is run by the state's Office of Consumer Health Services and is geared toward small businesses and their employees.
According to the National Conference of State Legislatures, 10 other states and the District of Columbia have passed exchange legislation since President Barack Obama signed the Affordable Care Act. Legislation is pending in four more states.
Indiana, Kentucky, New York and Rhode Island established their exchanges through governor-issued executive orders. Proposition E would prevent Missouri's governor from doing the same thing without voter or legislative approval.
Many states have resisted implementing a state-run exchange.
In 2011, New Mexico Gov. Susana Martinez vetoed legislation that would establish a state exchange. A year later, New Jersey Gov. Chris Christie vetoed a similar bill.
Eight states — Texas, Louisiana, South Dakota, Wisconsin, South Carolina, Florida, Maine and Alaska — have announced they will not create state-run health exchanges. Those states, excluding Alaska, have also announced they will return the majority of their grant funding to the federal government. Alaska is the only state that did not apply for a grant.
A New Hampshire law signed in June prohibits the state from establishing or participating in a state health insurance exchange, and instead turns that role over to the federal government.
Exchange legislation has failed in several more states, including Missouri.
Other states, such as Montana and Wyoming, have tasked commissions with determining the implications of state exchanges. Those states have taken no legislative steps toward establishing exchanges.
Fabien Levy, press secretary of the U.S. Department of Health and Human Services, said most states will take an active role in establishing an exchange.
“We’re giving states the flexibility they need to design exchanges that best fit their unique insurance markets and are consistent with steps states have already taken to move forward with exchanges,” Levy said in an email.
Levy said there was no “one-size-fits-all approach” to establishing an exchange and said states would have the opportunity to partner with another state or with the federal government. He said the Department of Health and Human Services would support states' progress regardless of the route they chose and would provide planning and implementation funds.
States have received substantial funding from the federal government. Levy said 49 states and the District of Columbia have received up to $1 million in Exchange Planning Grants and have used them to conduct community forums and establish studies on exchange feasibility.
Six states and a multi-state association led by the University of Massachusetts Medical School received $241 million in February to create technology systems for the exchanges. Thirty-five states have received Establishment Grants.
Levy estimated that by 2016, about 20 million Americans will acquire health insurance through the exchanges.
Supervising editor is Scott Swafford.