There are both logistical and cost concerns over the US’s Affordable Care Act. But there are also opportunities for states to pass some of the financial burden of healthcare to the federal government

Last week was the one-year anniversary of the United States Supreme Court’s decision to uphold the constitutionality of most of the Affordable Care Act (ACA). There are fewer than 100 days until the implementation of the ACA is set to begin, and yet there are a number of tasks that remain to be done. This is causing much anxiety in Washington DC and around the rest of the US.

The ACA is a major health reform. It aims to increase the affordability and rate of health insurance coverage for Americans, while also reducing the overall costs of health care. One of its main features is the creation of health insurance exchanges – insurance marketplaces with the goal of helping individuals and small businesses access affordable and quality health cover.

Enrolments for the federally run health insurance exchanges begin on 1 October 1 2013. The rollout of these exchanges has the potential to be 'a huge train wreck' according to Senate Finance Committee Chairman Max Baucus (D-Mont.). Even President Obama acknowledged there will be inevitable 'glitches and bumps' in the implementation.

Most Americans don’t understand the ACA and how it will affect their healthcare coverage. Raising awareness and distributing outreach materials is just one of the many tasks the federal government must accomplish before 1 October. Additionally, call centres must open to handle all questions and concerns about the ACA, and all the call centre agents must be educated about the law and exactly how it will work.

More importantly, the technology systems used to determine eligibility for health plans should be finished and tested before October. In order for these technology systems to work, approval for data exchanges between federal agencies must be established.

Even if all these tasks are completed, the federal government must have signed contracts with at least two multi-state plans in at least 31 states, available in 2014, and in all 50 states by 2016. This is a provision of the Multi-State Plan Program, which is designed to increase competition by offering more insurance options in each state.

Beyond the logistical concerns, there is also cost concern regarding the ACA. Many believe the ACA will cost much more than claimed. According to the Office of the Chief Actuary of Medicare, the impact of Medicare alone could be $10 trillion more than claimed. The total cost to the federal government could be exacerbated if young people don’t enrol in the exchanges, leaving them with a disproportionately older and sicker pool.

All of these concerns are focused on how the federal government will be affected, but the ACA also impacts state and local governments. Many state and local governments face growing financial burdens in paying for retiree health care programmes because they represent huge unfunded obligations. However, state and local government retiree benefits are not guaranteed under state constitutions, are not insured, and are not protected by federal law, which means the systems in place can be changed.

States that have little to no pre-funding for generous benefits could move their retirees into the ACA’s new exchanges. Under this arrangement, while the state and local governments could provide some level of premium support to the retirees shifted into the exchanges, much of the tab would be picked up by the federal government and/or participants. This provides an opportunity for some states to shore up their finances and relieve their taxpayers of part of the future burden of financing all of the retirees.

State taxpayers will not be completely free of the financial burden to support retiree health care benefits, but a large portion of the burden would be passed to the federal government. This would shift the overall tax burden because the cost would ultimately be shared among all the nation’s taxpayers since the exchanges are federally sponsored.

If states take advantage of this opportunity it would be good news for some residents and bad news for residents of fiscally responsible states. The specific outcomes of the implementation of the ACA cannot be predicted, but it is important to recognise the potential risks and opportunities. Now America needs to be prepared for all possible results.