NCPA - National Center for Policy Analysis

Many States Take a Wait-and-See Approach on New Insurance Exchanges

February 28, 2012

States are lagging in the creation of health insurance exchanges, the supermarkets where millions of consumers are supposed to buy subsidized private coverage under President Obama's health care overhaul, says the New York Times.

  • Many states are waiting for a Supreme Court decision or even the November election results, to see whether central elements of the new law might be overturned or repealed -- but that will be too late to start work.
  • By Jan. 1, 2013, the Obama administration will decide whether each state is ready to run its own exchange or whether the federal government should do the job instead.

Republican governors and state legislators across the country are split.  Some want to set up rudimentary exchanges with limited features -- as a defensive tactical maneuver -- rather than cede control to Washington.  More-conservative Republicans do not want to do anything at all.

Gov. Dave Heineman of Nebraska, a Republican who is chairman of the governors association, said his state would not "default to the federal government." But he said "it would be a costly mistake to spend millions of taxpayer dollars" building an exchange before the Supreme Court issues its decision in a challenge to the health care law, which is expected in late June.

  • Research by the Urban Institute found that 14 states had made significant progress in creating exchanges, 16 had made little or no progress and 20 were somewhere in between.
  • The federal government has given out more than $600 million to help states establish exchanges, but states must figure out how to pay the operating costs.
  • State officials, who are cutting budgets to cope with fiscal problems, are often reluctant to spend state revenues.

Insurance companies are urging state officials to set up exchanges because they generally prefer state regulation.  In addition, they stand to gain because the United States Treasury will send subsidy payments directly to insurers on behalf of low- and moderate-income people who enroll in health plans offered through an exchange.

Source: Robert Pear, "Many States Take a Wait-and-See Approach on New Insurance Exchanges," New York Times, February 27, 2012.

For text:


Browse more articles on Health Issues