Why is the Obama administration being so careful regarding the setting up of state run health insurance exchanges? The Affordable Healthcare Act expects that each state will set up and run a mechanism to help people obtain health care insurance. Many states are choosing not to do this. The law says that if a state doesn’t, the federal government will. I know I would be far more comfortable with a federal program than one run by my state (Louisiana). But for many states the Feds are giving them extensions on the deadlines. Why? Some states are definitely and simply not going to set up exchanges. So the federal government will be setting one up. Publish an 800 number for people to call. One call gets you a card. Problem “solved”. I understand that part of any such exchange is an expansion of Medicaid which is a state-run program. A state could refuse to honor claims based on AHA regulations. But the cost is born entirely by the feds anyway. Have the doctors submit to a central processing center which pays the part of the claim covered under the new regulations and forwards the state portion back to the state. This is a GQ question-what is involved in setting up one of these exchanges that makes a state-run program so important?
Because there’s a problem with how the law is drafted that cast some doubt on whether federally run exchanges will be able to offer the subsidies for the purchase of insurance.
Since they don’t know how that legal battle will turn out, they are trying to minimize its impact by having as many state exchanges as possible.
There are also secondary reasons which are the same as the ones that led them to draft it as focusing on state exchanges in the first place. Laboratories of democracy and all that. And there is the fact that everything got delayed by the waiting over the original Obamacare challenge and the House’s refusal to properly fund the agencies in charge of setting up Obamacare. But I think the main reason is the legal issue.
To expand a little on what RP said, health insurance is almost entirely regulated on the state level. A federal exchange means lots of federal employees interpreting state law and issuing regulations based on it. For obvious reasons, that’s not ideal.