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Every State’s Obamacare ‘Exchange’ to Be Subject to Sebelius’s Rule

10:40 AM, Jul 12, 2011 • By JEFFREY H. ANDERSON
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While Americans’ support for the repeal of Obamacare remains unwavering, the Obama administration continues to push the implementation of its highly unpopular overhaul. The administration is trying to coax states into implementing Obamacare’s government-run “exchanges” — with some success. But Politico Pulse writes that Obamacare “says incredibly little about how states’ exchanges will be determined [to be Obamacare]-compliant, only that the administration can take over a state’s exchange operation if the secretary determines, in 2013, that state won’t be ready” for Obamacare's scheduled grand opening, at the start of 2014.

Obama Sebelius

In other words, a 2,700-page mound of legislation — a de facto legal code — couldn’t find the space to outline what the states’ Obamacare exchanges must look like or how their progress in meeting those requirements would be judged. Instead, it leaves essentially unchecked power in the hands of Health and Human Services Secretary Kathleen Sebelius to make such determinations at her whim. In addition, Politico writes, “HHS has been relatively mum on what exactly a federally established health exchange will look like.” 

Of course, states could simply refuse to implement Obamacare-compatible exchanges, which is the tack that John Graham, Michael Cannon, Ben Domenech, and I have all argued they should take. Why implement something if you support its repeal and regard it as unconstitutional? 

Yesterday, however, Sebelius released a proposed 244-page rule (scroll down to “Read the regulations…”) that begins to explain what she’ll be looking for from the states.  The rule confirms Politico’s contention, stating, “In paragraph (a) of proposed §155.105, we propose to codify section 1321(c)(1)(B) of the Affordable Care Act that directs the Secretary to determine by January 1, 2013 whether a State’s Exchange will be fully operational by January 1, 2014. We believe that “fully operational” means that an Exchange is capable of beginning operations by October 1, 2013 to support the initial open enrollment period proposed in §155.410. HHS will make this determination through applying the State Exchange approval standards and process established in this section.”

Immediately thereafter, the rule states, “In paragraph (b), we outline the standards upon which HHS will approve a State Exchange. First, an Exchange must be established consistent with this subpart and be capable of carrying out the required functions of an Exchange consistent with the subparts contained within this part, including: subpart C related to minimum Exchange functions; subpart E related to enrollment; subpart H related to the operation of a SHOP; and subpart K related to certification of QHPs.”

As you can probably tell, it’s a good read. So grab a beer (or 12), grab a lawyer (or a team of them), and enjoy. Or else you could just skip the 244 pages, knowing that — as with the Obamacare waivers — they essentially amount to three words: Sebelius shall decide.

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