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LOVELL, Wyo. — Wyoming won’t be ready to operate a health insurance exchange by January 2014, setting the stage for a federal program run on the state’s behalf, state lawmakers said Thursday.

The federal health reform law gives states until Jan. 1 to develop a plan for running an exchange. Lawmakers who’ve studied exchanges expect the state will miss the deadline, increasing the likelihood the federal government will develop a program for Wyoming.

“As of January 2014, a federally run exchange will come to Wyoming,” Sen. Bill Landen, R-Casper, said during a meeting of the Legislature’s Joint Labor, Health and Social Services Committee.

Exchanges are virtual marketplaces where consumers and businesses can shop for insurance. They are expected to provide coverage to about 30,000 people in Wyoming, while addressing increasing costs through additional competition.

The Affordable Care Act requires states to operate exchanges by 2014. Federal officials have promised to operate exchanges for states that don’t comply.

Landen recommended lawmakers draft legislation to prepare Wyoming for a federal exchange. The state could decide later whether it wants to partner with the federal government, or take over exchange duties completely, he said.

“We’ve got time later on when we can jump in and do something,” he told lawmakers.

Landen served on a state committee that spent more than a year studying models for exchanges in Wyoming. Its members expressed little interest in allowing the federal government to run the state’s exchange.

“We wanted a Wyoming exchange based on our values, rather than defaulting to the federal government,” said Rep. Elaine Harvey, R-Lovell, who chairs both the exchange group and the health committee.

The group stopped work in March at the direction of the Wyoming Legislature, which passed a bill prohibiting state officials from committing to an exchange before next April.

Federal officials want states to declare their intentions by Nov. 16. The state won’t respond by that deadline because of the prohibition, Harvey said.

States that don’t respond by November will be subject to a federally run exchange.

“We’ve now defaulted to the federal government through our lack of work,” she said.

Work on a state exchange has also been hamstrung by a lack of information from the federal government, state officials complain. Gov. Matt Mead wrote Health and Human Services Secretary Kathleen Sebelius in July seeking more details related to exchanges. He has yet to receive a response.

Until the state receives some answers, it isn’t fair for the federal government to expect Wyoming to make a decision that could impact its budget, Mead said at a Thursday press conference.

“It’s hard for us and hard for me to make decisions when we can’t get answers to what I thought were fair questions of the secretary,” he told reporters. “Whatever your perspective on the ACA, you should at least recognize that it’s a big enough deal, that in fairness to Wyoming and all states, we are entitled to answers on these questions.”

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Questions also remain about the viability of an exchange in the nation’s least populous state. In the letter to Sebelius, Mead asked for data showing an exchange could be sustainable in Wyoming. Only about 30,000 people, or about 5 percent of Wyoming’s population, are expected to enroll in an exchange.

Even if the committee had continued its work, its members might have ultimately concluded a state exchange wasn’t right for Wyoming, Landen said.

“We might have discovered it was going to be way too expensive,” he said. “It might have been prohibitive that way.”

Wyoming shouldn’t fear a federal exchange, said Sen. Leslie Nutting, R-Cheyenne. Instead, lawmakers could examine other ways to address health care needs.

“A state exchange, we could end up spending a lot of money and not necessarily get a better product,” she said.

Other legislators aren’t convinced that missing the Jan. 1 deadline will result in a federal exchange in Wyoming. Lawmakers could resist by instructing the governor not to cooperate with the federal government in creating an exchange, said Rep. Keith Gingery, R-Jackson.

“I just don’t think we throw the towel in yet,” he said. “I think there are other options we can look at.”

Even if the federal government runs the state’s exchange, people in Wyoming might still be on the hook for the bill, Harvey said. Insurance plans sold on the exchange could be subject to a surcharge that would pay to run the program. Or the federal government might tax insurance companies that operate in Wyoming.

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