Research & Commentary: Extension Deadlines for Health Insurance Exchanges

Published November 15, 2012

Now that President Barack Obama has won reelection, the U.S. Department of Health and Human Services has extended the deadlines for states to implement health insurance exchanges.

Instead of having formal plans due to HHS by November 16, HHS is requiring states simply to say “yes” or “no” to state implementation by that date. Formal implementation plans are now due by December 14 or, if choosing a federal/state partnership, before February 15 of next year.

HHS Secretary Kathleen Sebelius says the deadline extensions are an example of continued flexibility from the federal government, and a representation of the flexibility states will have in a state-created health insurance exchange.

However, the final exchange rules distributed by HHS and the language in the Patient Protection and Affordable Care Act (PPACA) both say otherwise. Sebelius still will approve a state’s exchange only if “all minimum” federal requirements are met, and “an exchange may not establish rules that conflict with or prevent the application of exchange regulations promulgated by HHS.” Additionally, even for state-crafted exchanges the federal government is awarded oversight over all operations.

Therefore, opponents say state flexibility is limited and a “state” exchange is really just a state-established federal exchange.

The following documents offer further information regarding health insurance exchanges.


Research & Commentary: HHS Final Exchange Rules
Heartland Institute Health Care Policy Analyst Kendall Antekeier explains the final health insurance exchange rules from the U.S. Department of Health and Human Services and identifies what information is still missing. For example, she writes, “the final rules give no information regarding how a federally run exchange would function or how it would be funded.”

State Insurance Exchanges: The Case Against Implementation
Health Care News Managing Editor and Heartland Institute Research Fellow Benjamin Domenech provides several reasons states should avoid implementing a health insurance exchange. He writes, “Any exchange created to pass muster with HHS Secretary Kathleen Sebelius and the current rules within Obama’s law will be fundamentally flawed.”

Policy Tip Sheet—State Health Insurance Exchanges Post-SCOUTS
Kendall Antekeier outlines the arguments against state health insurance exchange implementation and provides facts about previously attempted exchanges. Antekeier writes, “If a state moves forward with implementing an exchange, it could invest valuable time and taxpayer dollars in developing a system only to discover it does not comply with final federal regulations.”

Consumer Power Report: Don’t Go Exchanging
In this Consumer Power Report, Benjamin Domenech explains how the “threat of an instituted ‘federal’ exchange—where a state presumably would have no input during the process—is a more hollow threat than ever before.”

Research & Commentary: Lessons from Massachusetts and Utah Insurance Exchanges
The Heartland Institute outlines two state experiences with health insurance exchanges and shows they have not produced desired results and have increased state health care costs. Heartland Institute Senior Fellow Peter Ferrara is quoted explaining how the Massachusetts exchange increased costs by 42 percent in less than three years.

Costs Hold Back State Health Insurance Exchanges
A KPMG poll reveals the factors holding back states from implementing health insurance exchanges, including costs, political ideology, and the uncertainty of the future of the Patient Protection and Affordable Care Act.


Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at, The Heartland Institute’s website at, and PolicyBot, Heartland’s free online research database at


If you have any questions about this issue or the Heartland Web site, contact Heartland Institute Manager of External Relations Kendall Antekeier at [email protected] or 312/377-4