HHS Grants Three States Conditional Approval To Create Exchanges

June 17, 2015 in News

HHS has granted conditional approval for state-run exchanges in Arkansas, Delaware and Pennsylvania, ahead of an expected Supreme Court decision on the legality of subsidies for U.S. residents purchasing health plans through the federal exchange, the AP/Sacramento Bee reports (Levy/Alonso-Zaldivar, AP/Sacramento Bee, 6/15).

Background

The subsidies are being challenged in King v. Burwell. At issue in the case is whether subsidies can be made available for individuals with coverage purchased through the federal exchange, or whether the aid is available only for state-established exchanges. If the Supreme Court rules that the subsidies are illegal on the federal exchange, 6.4 million U.S. residents could lose their financial assistance, according to an analysis by the Kaiser Family Foundation (iHealthBeat, 6/12).

State Plans

Delaware and Pennsylvania have received approval to run state exchanges for individual and small group markets in 2016, Modern Healthcare reports (Herman, Modern Healthcare, 6/15).

Delaware officials have not yet decided whether to abandon the federal exchange completely or to continue relying on the federal government for certain functions, according to the AP/Bee.

Delaware Health and Social Service Secretary Rita Landgraf said the state is currently in a legal “gray area” when it comes to any fallout from King v. Burwell because the state already oversees some exchange functions (AP/Sacramento Bee, 6/15).

In Pennsylvania, the Republican-held Legislature must approve funding for a state-run exchange. Approval for some of the legal mechanisms might also be needed. It is unclear whether the lawmakers will support establishing a state-administered exchange, according to the AP/Bee (AP/Sacramento Bee, 6/15).

Meanwhile, Arkansas has received approval to run a state exchange for the small group market in 2016 and the individual market in 2017 (Modern Healthcare, 6/15).

However, recently approved legislation prohibits the state from beginning to implement plans to establish a state-run exchange until after the Supreme Court releases its ruling (AP/Sacramento Bee, 6/15).

In a statement, HHS wrote, “We will continue to work collaboratively with states to provide the guidance and assistance they need to help consumers and small businesses compare and sign up for affordable private health insurance plans” (Ferris, The Hill, 6/15).

Illinois Hospital Association Proposes Using HealthCare.gov Tech

In related news, the Illinois Hospital Association has said if the subsidies for the federal exchange are invalidated, Illinois could lease technology from HealthCare.gov to help set up its own exchange, the AP/Sacramento Bee reports.

In a memo, the Illinois Hospital Association said it expects the federal government to create a leasing fee for states to use HealthCare.gov as a foundation to establish their own exchanges.

Alternatively, the hospital association suggests Illinois could rent an exchange system from a state such as Connecticut or Kentucky, which currently operate their own exchanges.

Avalere Health’s Caroline Pearson said, “We do believe that the administration is quietly discussing a HealthCare.gov lease option with the states and that it will roll out more specific guidelines in the event that the Supreme Court strikes down the subsidies” (Johnson, AP/Sacramento Bee, 6/15).

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