‘Will the Feds Be Ready With the Fallback Insurance Exchanges by October 2013?’

That’s the title of Robert Laszewski’s latest blog post:

The White House just released a report saying that good progress is being made [toward creating health insurance Exchanges] in 28 states. That begs the question, what about the other 22?

Writing in Kaiser Health News, Julie Appleby recently reported that that HHS has let just two contracts toward building the federal fallback exchanges. One is for $69 million to build the data hub so that federal agencies can share data with the exchanges–the IRS for example. The other contract is more directly related to building federal fallback exchanges, a $94 million contract.

But in their progress report today, the administration said that they have already advanced $729 million to the states for exchange construction––17 of those states receiving $1 million, or less. So, more than $700 million has gone to 33 states–and that is just federal money to date.

If the feds are going to be ready to launch 10 or 20 federal fallback exchanges these numbers just don’t compute. It is going to take a lot more than the $94 million HHS has contracted for to launch that many federal exchanges in the states that refuse to do so.

HHS says they will be ready. But they have been awfully secret over just how they are going to have lots of exchanges ready to go in 20 months. It is hard to see how that $94 million contract is more than just a down payment…

Right now, the numbers don’t compute–the number of states that could well not be ready, the federal money being spent by states that say they will offer exchanges, and the much less money HHS admits to be spending for those that will not be ready.

Where’s the plan?

The administration’s claim that 28 states are taking “strong steps” toward creating Exchanges is questionable. For one thing, the administration should update their “good progress” count to reflect the fact that Wisconsin Gov. Scott Walker (R) just returned a $37 million ObamaCare grant and refused to create an Exchange. In that light, the administration’s announcement is reminiscent of a scene from Animal House:

The question of whether states create ObamaCare Exchanges is, of course, central to the survival of the law.