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States Granted Delay in Setting Up Health Care Exchanges

Friday was supposed to be the deadline for states to declare whether they would establish health care exchanges under the new insurance law championed by President Obama, but last night the federal government extended the deadline in response to a request from the Republican Governors Association, whose members said they needed more information before making a decision.

It was the second time in a week that the Obama administration changed a deadline related to the Affordable Care Act. Last week, it extended the deadline for state exchange applications to mid-December. Now states will have until Dec. 14 to declare their intentions and to submit applications for health care exchanges. Additionally, it appears some states that originally opposed setting up their own exchanges may be deciding otherwise, including Florida, Iowa and Virginia, all of which have Republican governors. The AP is reporting that 16 states remain undecided.

Related: Obamacare Will Become Reality: What Does it Mean for You?

Once a state files its application to set up a health care exchange, the federal government still will have to give its seal of approval.

It all sounds very bureaucratic and burdensome, and it probably will be. But ultimately consumers will have a choice. Those who lack insurance coverage will be able to choose between a state exchange, if their state has set up one or several, and a federal exchange. The New York Times has reported that the feds plan on two national health insurance exchanges.

Related: "If You Don't Have Healthcare...You're Screwed"

By October 2013, individuals will be able to enroll in health care exchanges, but "it's going to be late 2014, 2015, 2016 before consumers really see the changes the law proposes," says Paul Keckley, a health economist and executive director of the Deloitte Center for Health Solutions.

In addition to extending coverage, the Affordable Care Act, often called Obamacare by opponents and even by some supporters, is also designed to help control and ultimately reduce health care costs, which have been rising at rates far exceeding inflation. "The real test of cost reduction in the Affordable Care Act won't be known for a while," Keckley says. "But we know that a lot of what's done in health care is unnecessary care -- as much as 20% of tests and surgeries we do unnecessary."

He says the law attempts to cut costs by "changing the rules whereby doctors and hospitals are paid to move from fee for service to performance and value," which could be a real sticking point. In the meantime, says Keckley, insurance costs have been rising 1% to 5% due to new requirements of the law.

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