Health Insurance Exchanges after the Obamacare Ruling

Last week’s U.S. Supreme Court ruling on the constitutionality of the Patient Protection and Affordable Care Act means that states will need to act quickly to develop health insurance exchanges as mandated by the law. From law firm McKenna Long:

“With the ACA emerging relatively unscathed in the Supreme Court’s ruling, exchange planners have a lot of work to do if they hope to be ready by 2014.”

Many states had postponed implementation pending a decision from the high court. But the first deadline of November 16 – when states are required to inform the federal government of their exchange plan – is rapidly approaching.

We’ll continue to report on the exchanges as they develop. In the meantime, three considerations:

1. Implementation delays are likely:

“Many states deferred actions to plan for individual and small business health insurance exchanges pending the Court’s decision. In addition, many states have yet to pass authorizing legislation for exchanges, develop Medicaid enrollment and income verification systems, or achieve consensus on state exchange design. Faced with these realities, policy-makers may also be pressed to postpone the law’s effective dates.” (Patton Boggs)

2. More individuals will be covered by insurance exchanges than originally expected:

“Under the Court’s ruling, states may decide to forego the Act’s Medicaid expansion provisions. If states do not expand Medicaid coverage, individuals who would have been eligible for Medicaid will now likely find coverage available under the Act’s health insurance exchanges. In addition, these individuals could be eligible for federal subsidies for exchange-based coverage.” (Proskauer Rose)

3. Most states will probably join federally-run exchanges:

“The question is how many states, even among those who apply to establish state-based exchanges, will be ready to run their own exchange in 2014? … According to recent National Association of Insurance Commissioners projections, 26 states will be ready to deploy state-based exchanges under HHS’s deadlines. But other experts paint a much different picture. Joel Ario, a former HHS leader who worked on exchanges, has said, “there are 15 to 20 states that have a chance of achieving certification” but “less than half of that number have a good chance.” MLA Senior Managing Director Cindy Gillespie has said that as many as 40 states could have some form of a federally facilitated or partnership exchange in 2014.” (McKenna Long)

Read the updates:

The Future of Health Reform: Impact of the U.S. Supreme Court Decision in National Federation of Independent Business et al. v. Sebelius – Patton Boggs LLP

Supreme Court Upholds the Affordable Care Act’s Individual Mandate: What It Means for Employers and Plan Sponsors – Proskauer Rose LLP

State of the States: Health Insurance Exchange Developments – McKenna Long & Aldridge LLP

See also:

What the Healthcare Ruling Means for the Insurance Industry – Obamacare Analysis

Health Reform Law: A Roundup of Obamacare Legal Analysis

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