Health Care Exchanges: State Legislators Briefed On New Rules, Consider Path Forward

TAMPA -- The legislative sessions that will begin in a month's time will likely be dominated by debates over how to implement the kind of exchange systems mandated under President Barack Obama's signature health care law. Lawmakers throughout the country, among other interested parties, are already planning in earnest.

As state legislators attempt to create exchanges that best address providing the highest quality services at the lowest costs, questions remain over a variety of federally-mandated rules on the actual process of setting up the centers. Obama's federal health care reform law requires the implementation of exchanges as a place for consumers to compare and purchase insurance plans. Now, new announcements from the U.S. Department of Health and Human Services released Tuesday regarding exchange planning could change how states grapple with the issue.

Legislators are meeting in Tampa this week for the National Conference of State Legislatures' annual Fall Forum, which includes discussions among the NCSL's health care reform task force. Steve Larsen, deputy administrator of the Centers for Medicare and Medicaid Services, briefed the leaders on Wednesday on new rules announced by HHS.

According to one such provision, states could continue to receive federal grants for the implementation of health insurance exchanges past the required set up date of Jan. 1, 2014, if they have already started implementation. The grants would be awarded in 2014 and funds available in future years for the exchanges.

Larsen also explained that, while states are required to have exchanges certified by HHS by Jan. 1, 2013, the department will be working with states to address exchanges not certified by that date. This would include having a federally-managed exchange in place that could be handed off to the state at a later date, as well as continued federal grants to states through 2014 to help with exchange set-up. Larsen also said that HHS will be hosting discussions within the next two weeks for smaller states to discuss collaborating on exchange management.

North Dakota state Sen. Judy Lee (R-West Fargo) questioned Larsen on the dates, noting her state legislature is not scheduled to meet again until 2013. North Dakota is one of the few states that continue biennial sessions, and a November special session failed to come to a solution on health exchanges.

"It's still really a conundrum for us who are not dealing with sessions until 2013," said Lee, who has been outspoken on the health care exchange issue.

Georgia Sen. Renee Unterman (R-Buford), the chamber's health committee chairwoman, said the failure of the congressional Joint Select Committee on Deficit Reduction concerns her when looking forward on health care implementation, as the failure of the committee requires cuts in federal programs across the board.

"If the federal government cannot make up their mind about balancing the budget, I don't feel comfortable in my fiduciary position as a lawmaker," Unterman said. "We have to balance our state budget and if we are relying on federal funding we are in a precarious position.