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Meeting Suggests Many States May Delay Exchange Legislation Until 2012, Attendee Says

By John Reichard, CQ HealthBeat Editor

December 16, 2010 -- The first of a two-day, closed-door, HHS meeting with representatives from 44 states suggested that in many cases states will delay passing laws to create health insurance exchanges until 2012, according to one attendee.

"The bottom line is that there are a lot of unanswered questions states have about creating exchanges" under the health care law, said the attendee, who asked not to be identified because the meeting was private.

States have flexibility under the law to structure exchanges in different ways. HHS has urged that, if possible, they begin passing legislation in 2011 to get that process underway.

States must prove to HHS by January 2013 that they will have an effective exchange ready to go by January 2014 or else the federal government will operate the new health insurance marketplaces.

One issue facing the states is what to do if they have laws on the book that mandate benefits that exceed those required in any federal minimum benefits package for exchanges.

States must either adopt the federal package or pay the added costs of care required under any more extensive state mandate.

But it was clear at the meeting that state officials won't know what is in the federally-mandated package before late next year, complicating decisions on what would go into state legislation, the attendee said.

"Instead of seeing a lot of states take this up [in 2011] I think we'll see some states" do so, the participant said.

The attendee added that HHS officials appear to be listening to concerns expressed by state representatives. "When we talk, they incorporate the feedback," the attendee said. Federal officials are "forthcoming that they can't be forthcoming."

Asked why they can't be forthcoming, the attendee cited the slow nature of rulemaking relating to exchanges and said it appears that key policy decisions haven't yet been made at the federal level relating to aspects of these insurance marketplaces.

Are state officials becoming more pessimistic about getting the job done on time? "I didn't see anybody throw up their hands and say 'we give up," the attendee responded.

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