In an interview, HHS official Hash said the government is undaunted by the prospect of running exchanges in half the states or more.
"What we are talking about building here is a system that is really using 21st century technology, and it's not dependent like in the past on bricks and mortar or how many (federal employees) you have," said Hash. "Information technology produces the opportunity for efficiency. It's much more easily scalable if you need to do it for a larger number of individuals."
Paper applications also will be accepted. And Hash expects people will have plenty of help to navigate the system, from volunteers to insurers advertising to reach new customers.
The government has awarded two big technology contracts for exchanges.
HHS rejected an Associated Press request to interview the contractors.
Virginia-based CGI Federal Inc. is building the federal exchange. Maryland-based Quality Software Services Inc. is building what's called the federal data services hub, an electronic back office that will be used by the federal exchange and state exchanges to verify identity, income, citizenship and legal residence.
Running the data hub will involve securely checking sensitive personal information held by agencies such as the Social Security Administration, Internal Revenue Service and Homeland Security Department.
The administration says consumers should not notice any difference between the federal exchange and marketplaces run by the states. State regulators disagree.
"I think we would be giving up something," said Praeger, the Kansas insurance commissioner. "It would have much more of a federal flavor than a Kansas flavor."
Praeger wants Kansas to have a state-run exchange, but GOP Gov. Sam Brownback and Republican state legislators are opposed. If opponents prevail, the state will have a federal exchange.
But conservatives are raising yet another argument in hopes of shutting down federal exchanges.
Led by Cato Institute economist Michael Cannon, several opponents say the letter of the complex law precludes the government from subsidizing coverage through the federal exchange. They say the law allows only tax credits to help consumers pay premiums in state exchanges, not the federal exchange, and that's the way Congress intended it. If states don't set up exchanges, that would starve the health care overhaul of money and cause it to unravel, they contend.
But the IRS and two nonpartisan congressional units — the Congressional Budget Office and the Joint Committee on Taxation — conducted their own analyses and concluded that subsidies are available in both types of exchanges, federal and state-run. Senate Finance Committee Chairman Max Baucus, D-Mont., one of the law's principal authors, says that's exactly how Congress intended it.
At the National Association of Insurance Commissioners, spokesman Scott Holeman says, "At this time, we don't have any reason to question the federal government's interpretation of the statute."
The dispute may wind up in court but probably wouldn't get resolved until after the exchanges are up and running.
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