With only six months until the start of open enrollment for Obamacare, state and federal health officials are racing to get insurance regulations and systems up and running in time.
"The Feds are saying they're on track and the system is being tested, and they're working out the kinks," said Sabrina Corlette, research professor at the Health Policy Institute at Georgetown University. Still, she added, "There's a pretty steep uphill climb yet, before October 1, 2013."
The biggest challenge remains building out the IT infrastructure that will provide the backbone for enrollment—the new state health insurance exchanges that will serve as the gateway for individuals to obtain insurance under the Affordable Care Act and find out whether they qualify for Medicaid or insurance subsidies.
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Beyond the infrastructure, the final regulations aren't there yet, either. The Department of Health and Human Services is still finalizing rules for insurers about what kinds of plans and rates they can offer on exchanges, along with new rules for states about how eligibility for Medicaid coverage will be calculated.
"The rules continue and the material continue to come out," said Karen Ignagni, president and CEO of America's Health Insurance Plans. "I think in another month, we'll have a much better sense than we do today."
With rules still in flux, the major insurers are still not sure to what extent they will be offering plans on the new state exchanges.
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The nation's largest Medicaid insurer, UnitedHealth also said it expects to participate in anywhere from 10 to 24 markets.
"We are expecting and preparing for an 'exchange' category of coverage," said UnitedHealth spokesman Tyler Mason, "We anticipate this category will have meaningful participation and that we will serve the majority of those markets."
While the Obama administration is building and will operate half of the state insurance exchanges, and partner on exchanges with more than half dozen other states, insurers still have to meet both federal and state insurance regulations for each individual exchange.
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Connecticut-based Cigna has decided it will not participate in the insurance exchange in its home state and opted out of bidding for a federal multistate plan option, but still plans to take part in other state marketplaces.
"We expect to sell individual and family plans both on and off exchanges in select markets where we can deliver on our strengths," said Cigna spokesman Joseph Mondy.
The big question is how much new demand insurers will see in the individual market, under the Obamacare Medicaid Expansion plan, which would make low-income adults newly eligible for the state-federal health program for the poor.
A 2012 Kaiser Commission study estimated more than 21 million people could gain coverage under Medicaid expansion by 2022 if all states opted in to the plan; roughly 7 million of them children and disabled adults who already qualify but are not currently enrolled.
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The Supreme Court gave states the right to opt out of Medicaid expansion, and so far, Texas, Louisiana, Tennessee and 15 other states led by Republican governors have opted out.
Yet, analysts say those states could well see their Medicaid rolls and costs expand. The rollout of Obamacare in January will likely prompt eligible people not currently enrolled to sign up for coverage.
"The states are nervous about that," said Dianne Heffron, a former official with the Center for Medicare & Medicaid Services, and now with Mercer's Government Human Services Consulting unit.
While the federal government will pick up the full cost of newly eligible Medicaid enrollees through 2017, state reimbursement for those who would have been eligible before the passage of Obamacare will paid under 2009 federal reimbursement levels, which range from 50 to 75 percent.
"If you would have qualified for eligibility in Medicaid under those '09 standards you are considered not newly eligible but oldly eligible," said Heffron. "The state picks up a much larger portion than the newly eligible people."
Given the scale and the complexity of all the work still to be done to before next fall, Heffron expects the start of the open enrollment season in the fall to be bumpy. Corlette agrees, noting it took six months to work out the problems with the rollout of the Medicare Part D Drug program for seniors in 2005.
"It's about the biggest federal project anybody's ever undertaken," Corlette said. "Medicare pales in comparison to what they're trying to build."
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—By Bertha Coombs; Follow her on Twitter: @coombscnbc