States that do not meet federal deadlines may still have a chance to run health insurance exchanges

Health Insurance NewsThe federal government has been relenting on its once strict mandates regarding health insurance exchanges, namely on the deadlines given for states to establish such programs. Originally, states that rejected the notion of exchanges outright would relinquish this responsibility to the federal government, who would then run the exchanges. In this scenario, state officials would have no say in the practices of the exchange programs. Spurred by complaints over the lack of guidance from the government, however, the Obama administration is relenting on these strict mandates and giving states another chance to set up an exchange themselves.

Thus far, only eleven states have fully adopted the concept of insurance exchange, making moves to build a system of their own. Given the icy reception of the health care reform, the Department of Health and Human Services is now drafting new plans concerning exchanges.

The agency has already softened the consequences imposed on states that fail to submit their plans on the exchanges – which are due at the beginning of 2013. The agency is unliky to mimic this gesture, but has announced a proposal that would institute a new partnership between the federal government and states that do not meet the deadline. This partnership would allow states to have a role in federal-control health insurance exchanges, allowing state legislators to influence policy and insurance regulators to enforce said policies.

The softening of federal regulations may help states warm to the idea of health care reform. If not, however, the government is poised to take action.

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