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: this should not be taken as tax or legal advice.

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


Maine implemented its guaranteed issue policy in 1993, and is one of only five states that currently requires community rating in the individual market.  Under community rating, insurers charge all people covered by the same type of health insurance policy the same premium without regard to age, gender, health status, occupation, or other factors.  

The Enacted Bill makes the following changes effective July 1st, 2011:

SECTION 32. IC 27-8-15-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. This chapter applies to any individual or group health insurance plan that is issued for delivery in Indiana to at least three (3) two (2) employees of a small employer located in Indiana if one (1) of the following conditions is met:         (1) Any part of the premium or benefits is paid by a small employer or any covered individual is reimbursed, whether through wage adjustments or otherwise, by a small employer for any part of the premium not including the administrative expenses of administering a payroll deduction plan where the employee contributes one hundred percent (100%) of the premium without reimbursement.         (2) The health benefit plan is treated by the employer or any of the covered individuals as part of a plan or program for purposes of Section 106 or 162 of the United States Internal Revenue Code. SOURCE: IC 27-8-15-8.5; (11)HE1486.1.33. -->

Effectively, this bill gives small employers more leeway in setting up an HRA to reimburse individual premiums, and allows individual policies to be sold at the workplace by insurance brokers.  

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

Guaranteed issue health insurance refers to health insurance that does not involve the process of medical underwriting and must be provided to an eligible applicant regardless of the applicant’s age, gender, or any pre-existing health condition prior to enrollment. In five U.S. states (MA, ME, NY, NJ, VT) medical underwriting is not allowed - that is, all individual market insurance companies must provide guaranteed issue individual health insurance plans. In the remaining states, where medical underwriting is allowed in the individual market, the availability of guaranteed issue health insurance varies by state.

Effective January 1st, 2006, federal law (HIPAA) requires all states to provide guaranteed individual health plans to residents who meet certain eligibility criteria. Individuals who meet this criteria are commonly referred to as "HIPAA-eligible" (or "federally HIPAA-eligible") individuals. If an individual meets the federal definition of "HIPAA-eligible", then the state must provide that individual with guaranteed issue individual health insurance. Typically, states provide these plans through a state risk pool. However, some states transfer this responsibility to private insurance companies.
Most states go far beyond this federal mandate and offer guaranteed issue individual health insurance plans to all of their uninsurable residents.