Facing pressure from Republican governors, the Obama administration has officially pushed back the deadline for state governments to declare whether or not they're setting up ObamaCare's health insurance exchanges, reports CBS News. States were supposed to tell the Department of Health and Human Services whether they would create the exchanges by today, but now they have until December 14 to declare their intentions. They can also wait until February to decide whether they want to set up an exchange in partnership with the federal government.
The Obama administration clearly wants as many states as possible to agree to bear the burden of setting up the exchanges. The federal government will build and operate exchanges in states that decide not to create exchanges on their own, or at least it will try, provided it can get the funding and overcome various legal challenges.
HHS is characterizing this move as an accomodation, telling CBS that the extended deadline is part of an "effort to be as flexible as possible."
If states actually want to preserve their flexibility, they should avoid building the exchanges at all. State-created exchanges would be subject to federal approval and oversight, giving the states few options for control, and leaving many crucial decisions up to HHS Secretary Kathleen Sebelius.
As The Washington Examiner's Philip Klein recently pointed out, the text of the health law specifies that “the [HHS] Secretary shall, by regulation, establish criteria for the certification of health plans as qualified health plans," and also says that “an Exchange may not make available any health plan that is not a qualified health plan.”
"In other words," writes Klein, "Sebelius will get to decide what type of health care plans can be offered on these state exchanges." Sebelius will also get to make determinations about how health plans offered in the exchanges are rated, about language used to describe plan features, and about overall presentation of plan options. And federal rules will override conflicting state policies. ObamaCare states that “an Exchange may not establish rules that conflict with or prevent the application of regulations promulgated by the Secretary under this subtitle.” State control? Federal control? Either way, it's Washington's way.
States, meanwhile, would bear substantial costs if they chose to set up their own exchanges. Running an exchange could cost a state anywhere from $10 million to $100 million a year, according to the Cato Institute's Michael Cannon, and ObamaCare's legislative language indicates that businesses in states that opt out won't be subject to the law's employer health insurance mandate, a $2,000 annual per employee tax on many employers who don't provide qualifying insurance.
HHS wants to give states every opportunity to incur these costs themselves rather than leave the federal government to fund and manage those exchanges. So sure, it's attempting to create additional flexibility for implementing ObamaCare. But mostly for itself.