In a letter to the nation’s governors on Nov. 9, HHS Secretary Kathleen Sebelius eased a tight deadline for the states to declare whether and how they will build health insurance exchanges mandated and funded under the Affordable Care Act.

States can build an exchange on their own, partner with one or more other states, or have the federal government buid and run it. “The deadline for a Declaration Letter for a State-based Exchange remains Friday, November 16, 2012,” Sebelius wrote in the letter. “However, today, in order to continue to provide you with appropriate technical support if you are pursuing a State-based Exchange, HHS is extending the deadline for State-based Exchange Blueprint application submissions to Friday, December 14, 2012. HHS will approve or conditionally approve the State-based Exchanges for 2014 by the statutory deadline of January 1, 2013.

“Additionally, if you are pursuing a State Partnership Exchange, we will accept Declaration Letters and Blueprint Applications and make approval determinations for State Partnership Exchanges on a rolling basis. The final deadline for both the Declaration Letter and Blueprint Application for State Partnership Exchanges that would be effective for 2014 has been extended to Friday, February 15, 2013. And states will be able to apply to run Exchanges in subsequent years.”

Sebelius reminded states of previous flexibility granted to them, including availability of funds no matter where they are in the process of building an exchange, and whether it will be a wholly state effort, partnership with other states, or in concert with the federal government. Further, states can apply for funds through 2014 and use the money not only to build an exchange, but to fund start-up costs if the exchange is not yet self-sustaining. “The next application deadline for Level 1 and Level 2 Exchange establishment grants is November 15, 2012,” Sebelius told the governors. “I encourage you to take advantage of these additional resources.

The Washington Post reports that three states--Florida, Kansas and Virginia--announced on Nov. 8 that they will not build an exchange and leave the task to the federal government. The Post notes that consulting firm Avalere Health expects a third of the states to do the same.

Sebelius' letter to the governors is available here.

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