Insurance exchanges: Will they be ready by Jan. 1, 2014?

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The months are winding down until the health insurance exchanges mandated under the Affordable Care Act (ACA) must be operational, and 17 states have declared their intent to open state-based exchanges, while seven have made plans for a partnership with the federal government, and another 27 have decided to let the feds take over their exchanges altogether.

Exchanges must be established by January 1, 2014, and are intended to allow individuals and small businesses to shop for health insurance. States had the option of establishing state-based exchanges, allowing the U.S. Department of Health and Human Services (HHS) to establish an exchange for the state, or forming a partnership with HHS.

HHS offered federal grants for states to create their own state-based exchanges, with nearly $4 billion in planning, establishment, and early innovator grants awarded so far. California received the most grant funding-more than $900 million, including $1 million in planning funds-for its exchange, which has an annual operating cost of $288 million. New York trailed California with $368.9 million in federal grants. States that have established their own exchanges are beginning to release rate information for their plans.

The next deadline for the program is October 1, 2013, when open enrollment must begin for coverage offered through the exchange in 2014. By January 1, 2014, all exchanges must be open, operational, and offering coverage in every state.

The marketplaces were created with the goal of increasing the availability of affordable insurance options for individuals who currently can’t afford private insurance but don’t quality for federal assistance programs, or who can’t purchase insurance through their employer. Ideally, the program will decrease the amount of uncompensated care physicians currently provide.