The Obama administration announced late Thursday that it would give states another month to notify the federal government whether they intend to run an exchange or defer to the federal government.
In response to a request from Republican governors, Health and Human Services Secretary Kathleen Sebelius gave states until Dec. 14 to submit letters of intent, as well as detailed plans, to build the state exchanges. The original deadline had been Friday, Nov. 16.
Originally, governors were supposed to provide the Department of Health and Human Services both their intent and a blueprint for setting up and operating an exchange by Nov. 16. But last week Sebelius told states that while their intent was still due Nov. 16, the blueprint deadline was extended until Dec. 14.
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Other states that decline to set up their own exchanges have another three months, until Feb. 15, to opt to partner with the federal government.
"We are confident governors will have enough time to decide whether they want to establish an exchange, work in partnership with the federal government or have a federally-facilitated exchange in their state. We look forward to working with governors as we continue to implement the law," Sebelius wrote Thursday in a letter to the Republican Governors Association.
She said the administration is committed to "providing states with the flexibility, resources and time they need to deliver the benefits of the health care law to the American people."
Sebelius's letter was in response to a request from the association to extend both deadlines until after HHS publishes rules detailing how the exchanges would work.
"As has been stated many times, before making any final policy decisions, governors must carefully consider the short and long-term implications of an expanded entitlement program and the consequences of significantly increasing the size of government to manage these programs," Virginia Gov. Bob McDonnell and Louisiana Gov. Bobby Jindal wrote in a letter to the administration Wednesday.
Under the Patient Protection and Affordable Care Act, exchanges would operate in every state to allow individuals to buy health insurance. Exchanges can be run by individual states, by the federal government or by a combination of the two under an arrangement known as a "state partnership exchange." The exchanges are scheduled to begin operating on Jan. 1, 2014.
Though the law intended that each state run its own exchange, many governors have refused to do so, or stalled making plans until after the presidential election. Others have complained there hasn't been enough guidance from the government on how to do so. For those that don't intend to set up an exchange, the government will set up one for them.
According to the Kaiser Family Foundation, some 15 states and the District of Columbia have established state exchanges so far, another 11 states have decided not to create exchanges, and four plan to set up partnerships. The others are still weighing their options.
Also read: How brokers fit into the exchange puzzle
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