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Virginia Officials Deliberately Moving Slowly on Health Care Exchange

If Supreme Court upholds health-care reform, governor would have to call special session.

Photo by Michael Lee Pope.

Virginia has eight months to create a certification plan for how it plans to create a health-care exchange, a legal requirement of President Barack Obama’s Patient Protection and Affordable Care Act. But Virginia is lagging far behind other states, which have made more progress toward creating the new exchanges, state-run insurance markets designed to operate online. So far, the state has failed to act on a majority of the recommendations created by the Virginia Health Reform Initiative.

“We are deliberately moving slowly to make sure we don’t get ahead of the Supreme Court ruling,” said Virginia Secretary of Health and Human Resources Bill Hazel.

In June, the Supreme Court is expected to rule on the constitutionality of health-care reform. State officials are trying to prepare for a number of scenarios. One would be that the court finds the mandate to purchase health insurance unconstitutional, which Hazel said would undercut the creation of the exchanges because they depend on federal subsidies. Another scenario would be that the court rules the entire act unconstitutional, which would mothball the entire project. A third scenario would be that the court upholds the law, a development that would prompt fast action in Virginia to meet the Jan. 1, 2013 deadline for creating a certification plan outlining how the exchanges would be created.

“We have teed up the ball,” said Hazel. “But we don’t want to hit the ball yet.”

THIS WEEK, the U.S. Department of Health and Human Services released new rules designed to help states set standards for establishing health-care exchanges. The 642-page document provides guidance on how states should establish exchanges, qualify health plans for participation and determine the eligibility of individuals in the system. Federal officials envision the exchanges as the cornerstone of an individual’s interface with their own health care.

“It’s kind of like a Travelocity for health insurance,” said Brian Chiglinsky, spokesman for the Centers for Medicare and Medicaid. “You can put some basic information in get some basic information about yourself and pull up affordable options for health insurance.”

Obama’s health-care reform was designed to provide coverage to more than 30 million uninsured Americans. In addition to the creation of the state-run exchanges, the law also calls for an expansion of Medicaid services to the poor. Under the law, all states are required to have the health-care exchanges up and running by 2014. The rules released this week were designed in part to start shifting the policy focus to the states.

“We’re obviously under the statutory deadline of Jan. 1, 2014 to have state-based exchanges operating in every state,” said Chiglinsky. “And we are going to meet that, whether it’s a federal or state-based exchange.”

THE FATE THE REFORM efforts depends on what happens this summer at the Supreme Court. Officials in Richmond are ready to scrap the planning that’s already been conducted, especially since they haven’t invested that much into it anyway. If the law is determined to be constitutional, however, state leaders will have to scramble to catch up. Hazel said he would expect a special session on health care this fall if the bill if found to be constitutional.

“We would be on a tight timetable,” Hazel acknowledged.

One of the consequences of inaction could be increased federal oversight. Under the current law, if Virginia fails to create a health-care exchange the federal government will step in and create one for the commonwealth.

“Unless the governor calls a special session, outside of the special session that we are currently in,” said Del. Patrick Hope (D-47), “we are going to miss the deadline.”

So far, the governor has called a special session to appoint judges and a separate one to deal with the budget. But no special session has been called yet to address the looming deadline for health-care reform. Hazel said that he would expect the governor to call a special session if the Supreme Court decides the law is constitutional. Hope, who was a member of the Virginia Health Reform Initiative, said he would like to see an increased sense of urgency.

“We need to decide: Do we want Washington, D.C. to operate the exchange or do we want to operate it out of Richmond.”