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U.S. to operate 26 state health exchanges with little local help

U.S. Secretary of Health and Human Services Kathleen Sebelius addresses the first session of the Democratic National Convention in Charlotte
U.S. Secretary of Health and Human Services Kathleen Sebelius addresses the first session of the Democratic National Convention in Charlotte

WASHINGTON (Reuters) - The Obama administration said on Tuesday that it will operate federal online health insurance marketplaces in 26 of the 50 U.S. states with little or no input from local state officials.

The U.S. Department of Health and Human Services announced that a total of 24 states, including six with Republican governors, plus the District of Columbia, are on track to run their own marketplaces, known as healthcare exchanges, or to do so in partnership with the federal government.

The new tally, which follows a February 15 deadline for states to request a federal partnership exchange, underscores the logistical challenge facing the administration as it moves to set up federal marketplaces less than eight months before the October 1 opening of plan enrollment.

"No matter where a qualified consumer lives, he or she will have access to coverage through a marketplace," Health and Human Services Secretary Kathleen Sebelius said in a government blog post.

She also emphasized that states which have not opted for a state-run or federal partnership exchange will still be able to apply to run their own in future years.

The exchanges, which are being set up under President Barack Obama's 2010 healthcare reform law, will offer federally subsidized private health insurance to working families that qualify for assistance. An estimated 26 million people, many of them now uninsured, are expected to obtain coverage through a healthcare exchange over the next 10 years.

But the exchange plan, like other provisions of the Patient Protection and Affordable Care Act, has met with resistance from states, mainly those with Republican leadership.

An administration plan to expand the Medicaid program for the poor to another 12 million people also faces stiff Republican opposition among states.

HHS said on Tuesday that it received new applications for federal partnership exchanges from Iowa, Michigan, New Hampshire and West Virginia. Three other states - Delaware, Illinois and Arkansas - already have partnership exchanges in the works.

Sixteen states and the District of Columbia are moving to operate their own online marketplaces, while Utah is asking the government to certify its existing exchange for small groups.

Partnership exchanges allow state officials to have a role in qualifying insurance plans, determining beneficiary eligibility or both.

In contrast, the 26 states that have opted not to operate their own exchanges or partner with Washington would have little to do with the operations, which could come to dominate local health insurance markets in coming years.

Some of those states, including Ohio, have signaled an interest in preserving their role in local markets, particularly in the area of plan management.

Sebelius offered no details, but said: "Several other states have suggested their own approaches to contributing toward plan management in their marketplace in 2014."

(Reporting by David Morgan; Editing by David Gregorio)

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