According to the White House, 28 states are “on their way” to establishing new marketplaces, called health insurance exchanges, where consumers can begin to shop for health insurance starting January 1st, 2014.

Nancy-Ann DeParle, White House Deputy Chief of Staff, remarked, “States are taking strong steps to implement health reform. The Obama Administration is working in partnership with State leaders across the country... we will ensure Americans in every State have access to an Exchange and the same kinds of insurance choices as Members of Congress.”

But does that mean 22 states will not be ready in time? Administration officials said ““it would be premature at this point” to draw that conclusion.

While the government is reviewing another round of grant proposals to assist states, some states, including Wisconsin and Kansas, have said they plan to give the grant back. Last week, South Dakota’s governor said there is too much uncertainty for the state to move ahead with an exchange until after it learns the results of the Supreme Court case challenging the law, and the outcome of the November Presidential election.

Will that be too late?

“If states decide after the Supreme Court decision, we will work with them to get them as far down the path as possible,” said the official, noting that a state initially could do a partnership with the federal government, if necessary, then get certified to run its exchange solo after that. Residents in states that can’t — or won’t — run their own exchanges will be directed to a federally facilitated fallback exchange.

Still, some policy experts have questioned whether the federal government will have its backup system up and running by the time enrollment is set to open in the fall of 2013. “We are making substantial progress of development of federal exchanges,” the official said, “including signing contracts with private sector vendors to create the systems.”

Do you think the state exchanges will be ready?

Note: None of this should be taken as legal or tax advice.

Tuesday, April 12th, 2011 marked the five-year anniversary of Massachusetts' 2006 State Health Care Reform. The reform was signed into law by then-governor Mitt Romney with the goal of providing affordable health insurance coverage to the estimated 6% of Massachusetts residents that were uninsured at the time.

Massachusetts State Health Care Reform and the Affordable Care Act are virtually identical. Both reforms rely heavily on state-based health insurance exchanges, subsidies for qualifying individuals, and mandates for employers and individuals. As a result, Massachusetts presents the most appropriate example of what to expect from federal health care reform.

So, what have we learned from Massachusetts state reform?  The 2006 Massachusetts State Health Care Reform:

1. Created the MAHealthConnector (a state health insurance exchange) to provide guaranteed issue health insurance to MA residents;
2. Mandated that every resident of the state obtain a minimum level of health insurance or face penalties;
3. Mandated that employers provide a "fair and reasonable contribution" to their employees' health insurance premiums or face penalties; and
4. Provided free health insurance and partially-subsidized insurance to qualifying residents based on income.

 Proponents of the law argue that Massachusetts Health Reform:

• Has resulted in Mass. being the state with the highest percentage of insured residents, at 98% in April 2011, including 99.8% of children. 
• Has increased the percentage of private companies that offer health insurance from 70% in 2005 to greater than 77% today. 
• Has lowered the cost of individual health insurance premiums in Mass. due to the fact that primarily healthy people have moved to the individual market. 

 Opponents of the law argue that Massachusetts Health Reform:

• Has increased costs for its residents, $13,788 for a family of four in 2010, in the state that already had the highest medical costs in the nation prior to implementation. 
• Was setup for failure from the start due to its reliance on employer-sponsored health plans, plans that employers cannot afford due to rising costs. 
• Has resulted in more than half of the newly-insured residents receiving health insurance that is partially or completely subsidized by Massachusetts' taxpayers.

Has Massachusetts health care reform been properly utilized as a test bed for federal reform? Will the costs associated with Massachusetts health care reform be sustainable over the long term?

• Kansas ($31.5 million)
• Maryland ($6.2 million)
• Massachusetts ($35.6 million)
• New York ($27.4 million)
• Oklahoma ($54.6 million)
• Oregon ($48.1 million)
• Wisconsin ($37.8 million).

Individuals and small employers will be eligible to use the exchanges beginning in 2014.

A Health Insurance Exchange is a government-regulated marketplace of insurance plans with different tiers, or levels of coverage, offered to individuals or employers.  Supporters of Health Insurance Exchanges believe that government-regulated exchanges will increase competition and lower prices.

Currently, Utah and Massachusetts operate health insurance exchanges in their respective states.