19:32 GMT +3 hours26 May 2016

US States Scramble Ahead of Looming ‘Obamacare’ Deadline

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When US President Barack Obama was reelected last week, it ensured that his controversial, signature piece of legislation: The Affordable Care Act, or “Obamacare”, providing health insurance to more than 30 million Americans, is here to stay.

WASHINGTON, November 16 (By Sasha Horne for RIA Novosti) - When US President Barack Obama was reelected last week, it ensured that his controversial, signature piece of legislation: The Affordable Care Act, or “Obamacare”, providing health insurance to more than 30 million Americans, is here to stay.

His Republican opponent for the presidency, Mitt Romney, said he would get rid of “Obamacare” “day one” if elected. But now that Obama will serve a second term, more of the law will go into effect, and both critics and supporters are asking if the country and its individual states are ready to spend the necessary money and create the new structures required to put “Obamacare” into action.

"With the election over, it's really like the start gun went off," said Peter Harbage, president of Harbage Consulting, who has advised Democratic and Republican leaders at federal, state and local levels on health policy issues, in an interview with Greenwich Time, a newspaper in the state of Connecticut.

On Friday, US States were to face one of the first “Obamacare” deadlines: decide who would run their health exchanges, online marketplaces where individuals and small businesses could comparison shop for private health insurance, while health insurers could compete against one another to sell insurance in the marketplace.

Under “Obamacare,” millions of people not covered by employer health plans will get federal subsidies to purchase insurance through their state’s exchange. And for people whose incomes aren’t low enough for subsidies, they could still use the insurance exchanges to shop around for health care.

Each state has the option of building their own insurance exchange, letting the federal government do it for them, or choosing a partnership with Washington where they would run the exchange together.

The exchanges are supposed to be up and running by Oct. 1, 2013, with coverage starting in January 2014.

While some states, including California and Colorado which have Democratic leadership, took a proactive approach and have already started planning their own health exchanges, some Republican run states chose to defer action, with hopes Romney would win the election and repeal the health care law.

In a last minute scramble to get more time to decide, the Republican Governors Association petitioned the Obama administration to extend Friday’s deadline. Obama said yes and states now have until December 14 to decide if they will set up their own exchanges, let the feds do it, or share responsibilities.

But like other aspects of the healthcare law, the decision has become highly politicized.

According to the Kaiser Family Foundation, a non-profit health care policy organization, which is keeping tabs on the creation of state health insurance exchanges, 16 states and Washington, DC have announced plans to create their own exchanges, five states have said they are planning for a federal government partnership, and 16 other states are still weighing their options.

Thirteen states have opted for federally run exchanges, including some states, like South Carolina and Texas which opted to defer to the federal government as a symbolic stand against “Obamacare.” 

"As long as the federal government has the ability to force unknown mandates and costs upon our citizens, while retaining the sole power in approving what an exchange looks like, the notion of a state exchange is merely an illusion," wrote Texas Governor Rick Perry in a letter to the federal department administering the insurance exchange program.

Conservative groups like FreedomWorks, a grassroots non-profit organization that opposes the health care law, are assisting states in organizing their resistance.

“So how can we use state exchanges to fight the new health care law? Do nothing,” said Rusty Weiss who wrote an article on the FreedomWorks website, encouraging readers from Republican governed states to urge their leadership to take no action.  

The “do nothing” approach by default places those states in the federally run health exchange, a move Aaron McKethan, professor of health policy and management at the University of North Carolina at Chapel Hill, believes is counterproductive to critics conservative values that support less government.

“If you truly believe that your states, with ample flexibility, could do a better job than the federal government in organizing health care exchanges tailored to your constituents, implementing a state exchange now may promote your vision of states’ role in health care reform,” said McKethan in an opinion piece published on Forbes.com.

A recent poll by the Associated Press found that 63 percent of Americans would prefer states to run their own exchanges. And while several Republican run states, including Florida and New Mexico, have begun to shift on the issue, others, including Alaska, are standing their ground.

“Federally mandated programs should be paid for by federal dollars,” said Alaska Republican Governor Sean Parnell.

While some Republican governors have said the Obama administration hasn’t given them enough information on how the health care law works to make an informed decision, others are concerned about the cost associated with signing their states up for such an ambitious undertaking.

There are three primary ways Congress plans to pay for the Affordable Care Act including $741 billion in cuts to government spending, a tax penalty for people who don’t purchase insurance expected to drum up $55 billion over the next ten years, and a tax on the most expensive insurance plans that could net $111 billion, according to a Washington Post analysis of the Congressional Budget Office report.

States which opt to run their own exchanges will be required to share some of the costs, and with so much still yet to be determined, that’s a financial burden governors in states like Missouri and Virginia aren’t willing to sign up for just yet.

Costs aside, experts say the health care law is an enormous undertaking with a short timeline.

“It’s all new and it’s going to be complex and challenging,” said Jay Wolfson, professor of Public Health and Medicine at the University of South Florida. “The devil is in the details, and the details have not been created yet.”

“The health care law is over 2,000 pages long, but it doesn’t specify mechanics,” Wolfson said. “Over the next six months-to-a-year, federal and state governments will be writing operational provisions to dictate the bidding process for insurance companies, they’ll build websites, create a verification system, lease office space.”

And while states have only one more month to make decisions on who will run their exchanges, Alan Weil, executive director of the National Academy for State Health Policy said the decision states make today, don’t necessarily lock them into a long term agreement.

“The decision on which model states choose is a one year decision,” said Weil. “Within the year, states can learn observe from each other and establish best practices, this isn’t a one-time choice,” he said.

As decisions are made and additional guidelines are established for Obama’s signature legislation, the impact the law will leave on his legacy, depends on how the process plays out over the next 13 months. For now, as with many other parts of the healthcare act, it’s just too soon to tell.


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