WASHINGTON (AP) — President Barack Obama's health care overhaul is unfolding as a national experiment with American consumers as the guinea pigs. One big question: Who will do a better job — the states or the feds — shepherding uninsured people to sign up for the coverage they're required to get by next January?
By last Friday's deadline, the nation was about evenly split between states that decided they want a say in running these new insurance markets and states that decided to let the feds run them. The law left that choice to state governments, essentially telling them: Set up a market — called an exchange — or Washington will.
With some exceptions, states led by Democrats opted to set up their own exchanges and states led by Republicans declined.
Only months away from their official launch, the exchanges are supposed to make the mind-boggling task of buying health insurance more like shopping on Amazon.com — a point-and-click way of comparing complex plans, what they cover and what they don't, their deductibles, co-pays and so on.
Millions of people who don't have coverage through their employer will flock to the new exchanges. There, middle-class consumers will be able to buy private insurance policies of various kinds, in most cases with government help paying the premiums. Low-income people will be steered to safety-net health programs such as Medicaid.
“It's an experiment between the feds and the states, and among the states themselves,” said Robert Krughoff, president of Consumers' Checkbook, a nonprofit ratings group that has devised a similar online tool that many federal workers use to pick their health plans. Krughoff is skeptical that either the feds or the states have solved the technological challenge of making health insurance an easy experience.
Whether the bugs get worked out or not, consumers will be able to start signing up Oct. 1. The coverage is to take effect Jan. 1.
That's when two major provisions of the health care law kick in: the mandate requiring almost all Americans to carry health insurance, and the rule that says insurers can no longer turn away people in poor health.
Barring last-minute switches, 23 states plus Washington, D.C., have opted to run their own exchanges or partner with the Obama administration to run a joint version.
And 26 states are defaulting to the feds. But even in several of those, Republican governors are trying to carve out some kind of say by negotiating with the federal Health and Human Services Department.
(The status of one state, Utah, remained unclear; it got initial approval to run its own exchange but appears to be reconsidering.)
Nebraska and Iowa — each with a little more than a quarter-million uninsured to sign up, each with a Republican governor critical of the health care law — took different tacks.
Nebraska sided with most other GOP-led states in letting the feds set up its exchange. Iowa opted for a joint federal-state exchange.
“It's healthy for the states to have various choices,” said Ben Nelson, former Nebraska senator and now CEO of the National Association of Insurance Commissioners. “And there's no barrier to taking somebody else's ideas and making them work in your situation.”
As a senator, Nelson was one of several conservative Democrats who provided crucial votes to pass the health care overhaul.
The states setting up their own exchanges already are taking different paths.
Some will operate their markets much like major employers run their health plans, acting as “active purchasers” offering a limited choice of insurance carriers, in hopes of driving better bargains.
Others will just open their exchanges to all insurers that meet basic standards, then let consumers pick.
The health care law — “Obamacare,” as opponents still call it with a sneer — remains politically divisive. But state insurance exchanges, where they exist, have been popular.
Setting one up was a key to former GOP presidential candidate Mitt Romney's health care overhaul as governor of Massachusetts.
A recent AP poll found that Americans would prefer to have states run the new exchanges, by 63 percent to 32 percent. Among self-described conservatives, that margin was nearly 4-1 in favor of state control.
Yet with a few exceptions, Republican-led states are letting the feds set up their exchanges.
“There is a sense of irony that it's the more conservative states” making that choice, said Sandy Praeger, the Republican insurance commissioner in Kansas, a state declining to run its own exchange. First, she said, the law's opponents “put their money on the Supreme Court. Then on the election. Now that it's a reality, we may see some movement.”
Christine Ferguson, director of the Rhode Island Health Benefits Exchange, says she expects to see a shift to state control in the next few years.
“Many of the states have just run out of time for a variety of reasons,” she said. “I'd be surprised if in the longer run every state didn't want to have its own approach.”
Meanwhile, administration officials are keeping mum about the new federal exchange, other than to say it will open on time.
State by state: Implementation of Obama health law
A look at the how states are putting in place President Barack Obama's health care law, including health insurance exchanges and expansion of Medicaid coverage, along with the number of people in each state who don't have health insurance:
|State||Exchange option||Medicaid option||Uninsured residents|
|Alabama||Federal exchange||Not expanding||696,000|
|Alaska||Federal exchange||Decision pending||128,000|
|Arizona||Federal exchange||Plans expansion||1,306,000|
|Arkansas||Federal-state partnership||Decision pending-x||545,000|
|California||State exchange||Plans expansion||7,471,000|
|Colorado||State exchange||Plans expansion||817,000|
|Connecticut||State exchange||Plans expansion||391,000|
|Delaware||Federal-state partnership||Plans expansion||115,000|
|Washington, D.C.||State exchange||Plans expansion||65,000|
|Florida||Likely federal exchange||Decision pending||3,952,000|
|Georgia||Federal exchange||Not expanding||1,992,000|
|Hawaii||State exchange||Plans expansion||102,000|
|Idaho||State exchange||Decision pending||239,000|
|Illinois||Federal-state partnership||Plans expansion||1,795,000|
|Indiana||Federal exchange||Decision pending||856,000|
|Iowa||Federal-state partnership||Decision pending||292,000|
|Kansas||Federal exchange||Decision pending||361,000|
|Kentucky||State exchange||Decision pending||727,000|
|Louisiana||Federal exchange||Not expanding||811,000|
|Maine||Federal exchange||Not expanding||146,000|
|Maryland||State exchange||Plans expansion||734,000|
|Massachusetts||State exchange||Plans expansion||215,000|
|Michigan||Federal-state partnership||Plans expansion||1,336,000|
|Minnesota||State exchange||Plans expansion||453,000|
|Mississippi||Federal exchange||Not expanding||530,000|
|Missouri||Federal exchange||Decision pending-x||780,000|
|Montana||Federal exchange||Decision pending-x||179,000|
|Nebraska||Federal exchange||Decision pending||226,000|
|Nevada||State exchange||Plans expansion||555,000|
|New Hampshire||Federal-state partnership||Decision pending||136,000|
|New Jersey||Federal exchange||Decision pending||1,334,000|
|New Mexico||State exchange||Plans expansion||506,000|
|New York||State exchange||Plans expansion||2,780,000|
|North Carolina||Federal exchange||Not expanding||1,583,000|
|North Dakota||Federal exchange||Decision pending-x||74,000|
|Ohio||Federal exchange-xx||Plans expansion||1,578,000|
|Oklahoma||Federal exchange||Not expanding||597,000|
|Oregon||State exchange||Plans expansion||678,000|
|Pennsylvania||Federal exchange||Not expanding||1,319,000|
|Rhode Island||State exchange||Plans expansion||122,000|
|South Carolina||Federal exchange||Not expanding||754,000|
|South Dakota||Federal exchange||Not expanding||108,000|
|Tennessee||Federal exchange||Decision pending||982,000|
|Texas||Federal exchange||Not expanding||6,654,000|
|Utah||Status unclear||Decision pending||424,000|
|Virginia||Federal exchange-xx||Not expanding||1,023,000|
|West Virginia||Federal-state partnership||Decision pending||266,000|
|Wisconsin||Federal exchange||Not expanding||562,000|
|Wyoming||Federal exchange||Not expanding||84,000|
x-governor supports Medicaid expansion; legislature must approve
xx-state will oversee exchange insurance plans under federal law
Sources: Associated Press Research, U.S. Health and Human Services Department and the Urban Institute