Insurance exchanges under way

HIXThe most critical deadline is Oct 1, 2013, when state exchanges must be ready to start enrolling individuals. The exchanges become operational Jan. 1, 2014.

Critical deadline to enroll individuals is Oct. 1

The continuing saga around the deadline delay for states to decide whether they'll establish their own health insurance exchanges doesn't change the final upshot: All states are anticipated to have an online insurance marketplace, one way or another.

The delays may also make a federal/state partnership model for the exchange more palatable and a way out for unprepared states, at least in the initial years, according to an expert on state healthcare issues.

Health and Human Services Secretary Kathleen Sebelius in November extended the deadline to Dec. 14 for states to not only submit their blueprints for a state-based health insurance exchange but to decide whether they would establish the exchange on their own or seek federal help. 

In announcing the delay, Sebelius said HHS is "committed to providing states with the flexibility, resources, and time they need to deliver the benefits of the healthcare law to the American people."

Some states were revisiting their decision in light of President Barack Obama's reelection, said Patrick Howard, who leads Deloitte Consulting's state healthcare practice.

"The reality of the situation is that to get something like this decided is a collaborative process  -  the departments of insurance and health and human services, perhaps members of the governor's office all have to be on board  -  to make that final decision of which way you are going to go," he said, adding that the HHS secretary may have decided to give the states more time to complete that thought process inside their organizations.

Some states had held hard and fast to not making any plans, "but a number were doing, as well they should, contingency planning on both alternatives," Howard said. The most critical deadline is Oct 1, 2013, when state exchanges must be ready to start enrolling individuals. The exchanges become operational Jan. 1, 2014.

"You're marching toward a pretty tight timeline. I think a number of states will look at their own preparedness, and realistically ask, can we get all things done that we need to get done by Oct. 1, 2013," Howard said. If they have been doing contingency planning, it's possible that they can get there.

"If they haven't been doing things in the background and are starting from square one, the odds of them actually making an October implementation are relatively slim," he said.

What may become a more attractive option is the federal partnership model.

"I think more states will embrace that federal partnership model perhaps for a year and then transition to a state-based exchange, giving them a little more time to think through their business processes and technology," Howard said.

Some states can enable an exchange through an executive order, while others need legislative authority for setting up the organization to administer the program. Some state legislatures won't be meeting again until early 2014.