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Every state must have an exchange by Jan. 1, 2014, meaning HHS doesn’t have a lot of time to do a massive amount of work. The department could quickly run through a $1 billion fund designated for implementing the exchanges.
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Obama Faces Huge Challenge in
Setting Up Health Insurance Exchanges

The Hill
The Obama administration faces major logistical and financial challenges in creating health insurance exchanges for states that have declined to set up their own systems.

The exchanges were designed as the centerpiece of President Obama’s signature law, and are intended to make buying health insurance comparable to booking a flight or finding a compatible partner on Match.com.

Sixteen states -- most of them governed by Republicans -- have said they will not set up their own systems, forcing the federal government to come up with one instead.

Another five states said they want a federal-state partnership, while four others are considering partnerships.

It's a situation no one anticipated when the Affordable Care Act was written. The law assumed states would create and operate their own exchanges, and set aside billions in grants for that purpose.

“There's no way around it -- this is a big job,” said Sabrina Corlette, a health policy expert at Georgetown University.

Since different states have different insurance markets and different eligibility requirements for Medicaid, Obama’s Health and Human Services Department can’t simply take a system off the shelf as a one-size-fits-all fail-safe.

"You can't simply deploy one federal exchange across the board," said Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation. "Each state is different -- their eligibility systems are different, their insurance markets are different. [HHS is] going to have to build these exchanges to fit into the context of each state."

Every state must have an exchange by Jan. 1, 2014, meaning HHS doesn’t have a lot of time to do a massive amount of work. The department could quickly run through a $1 billion fund designated for implementing the exchanges.

Experts have predicted that the department will soon have to tap budgets from its other programs to cover exchange costs. Other have said it might charge fees on the insurance purchased in its exchanges once they are launched.

And as it moves forward, the department will continue to deal with political battles. Speaker John Boehner (R-Ohio) on Wednesday said repealing Obama’s law should be one of the topics covered in budget discussions in the lame-duck session.

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