WASHINGTON — The Obama administration on Thursday approved plans by seven states to create health insurance exchanges, the new marketplaces at the heart of the Affordable Care Act.
With this final round of approvals, the White House has signed off on blueprints by 17 states and the District of Columbia to operate their own exchanges in 2014, as long as they continue to meet certain benchmarks over the course of the next year.
“In all of these states, there’s more work to be done to be ready for open enrollment in October, but we believe they’ve made significant progress,” said Gary Cohen, director of the department’s Center for Consumer Information and Insurance Oversight.
Under the law, the insurance exchanges — which will be designed to work as a kind of Travelocity for individuals and small businesses wanting to buy insurance — are required to launch open enrollment on Oct. 1. By Jan. 1, consumers will be able to use federal subsidies to purchase coverage through the exchanges’ online portals.
The majority of states did not submit applications to run their own marketplace.
They now have two options. Theses states can decide to partner with the federal government, overseeing certain parts of the new exchange, or leave the entire task to the Obama administration.
States have until Feb. 15 to notify the federal government of which option they will pursue.
The administration approved four exchange applications from Republican governors — in Idaho, Nevada, New Mexico and Utah. The other three states given approval Thursday were California, Hawaii and Vermont.
The decision to approve Utah’s exchange application surprised many observers; the state previously had sought relief from some of the law’s requirements.
Utah already operates a statewide insurance marketplace called Avenue H, where small companies can send their employees to purchase coverage. Unlike the exchanges envisioned by the Affordable Care Act, Avenue H does not allow individuals to shop for coverage, nor does it interact with the state’s Medicaid program.
While Utah had initially asked for permission to operate its current exchange, state officials recently had sent the Obama administration a 72-page plan to modify the marketplace to meet the health-care law’s requirements.
“Utah has said they’ll develop a program that’s compliant with the law,” Cohen said. “They’ve said they plan to work with the law, so we’ll work with them to do that.”
In Utah, state officials said that Gov. Gary Herbert is reviewing the Department of Health and Human Services’s conditional approval.
“Of course we’ll review the HHS announcement and determine if the conditions are acceptable or reasonable for our state exchange and that includes sitting down with legislators,” said Ally Isom, Herbert’s deputy chief of staff. “But there is nothing about Utah’s path that changes as a result of today’s announcement.”
Mississippi’s application is the only one that has not yet gotten a ruling from the administration because of a dispute between the Republican governor and GOP insurance commissioners over who gets to decide whether the state will set up the new marketplace.