Obama Administration Waives Deadline for Exchanges

The Obama administration has decided to waive the deadline for states to opt into administering exchanges under Obamacare in the hopes that reluctant states will get on board.

Under the law, the secretary of health and human services was supposed to determine “on or before Jan. 1, 2013,” whether states were prepared to operate the online markets, known as insurance exchanges.

But the secretary, Kathleen Sebelius, working with the White House, said she would waive or extend the deadline for any states that expressed interest in creating their own exchanges or regulating insurance sold through a federal exchange.

The exchanges are a crucial element of President Obama’s health care law. Every state is supposed to have one by October 2013, and most Americans will be required to have coverage, starting in January 2014. The federal government will run the exchange in any state that is unwilling or unable to do so. It now appears that federal officials will have the primary responsibility for running exchanges in at least half the states, far more than expected when the law was passed in 2010.

Break Away from the Static

So far, 17 states have received “conditional” approval of their proposed state-run exchanges, including Utah, which has expressed reservations about enforcing the individual mandate and implementing other provisions of the law. Federal officials granted conditional approval to some states even though state legislators had not provided clear legal authority or money to run an exchange.

Secretary Sebelius is also holding out hope that some other states will agree to run “partnership exchanges” with the federal government and is giving them until February 15 to decide. It remains to be seen how successful this strategy will be in co-opting the states.

Best regards,
Kirk Reinitz, CPA