Effort To Remove Funds for State Exchanges May Increase Federal Role

On Tuesday, the House is scheduled to vote on a Republican bill (HR 1213) that would eliminate grants intended to help states establish health insurance exchanges under the federal health reform law, The Hill reports.

Analysts warn that the measure could increase the federal government's involvement in health care (Baker, The Hill, 5/2).

Details of Exchanges

Under the overhaul, states by January 2014 must create insurance exchanges that provide coverage options for individuals and small businesses. States can choose to administer their own exchanges, for which they must have some infrastructure in place by January 2013, or have the government run the exchanges for them (California Healthline, 12/17/10).

Analysts Weigh In

Last week, the Congressional Budget Office said the bill likely would result in the government becoming more involved in the exchanges.

Len Nichols, a health policy professor at George Mason University, said that without planning grants exchanges would be more costly, resulting in the need for HHS to step in and establish the exchanges.

A spokesperson for Rep. Fred Upton (R-Mich.) -- the bill's sponsor -- said the reform law does not give any flexibility to states on the exchanges, so the notion that the bill would limit states' choices is "smoke and mirrors" (The Hill, 5/2).

The bill is unlikely to pass the Democrat-controlled Senate. Meanwhile, the Office of Management and Budget on Monday in a statement said, "If the president is presented with HR 1213, his senior advisors would recommend that he veto the bill" (Baker, "Healthwatch," The Hill, 5/2).

States Look for Alternatives in Creating Exchanges

In related news, state lawmakers are exploring alternative ways to implement health exchanges after exchange legislation has failed in several state legislatures, Politico reports.

Govs. Mike Beebe (D-Ark.) and Nathan Deal (R-Ga.) are considering using executive orders to continue implementing health exchanges in their states.

After two health exchange bills died in the Mississippi Legislature last month, the state Insurance Department now is considering setting up the exchange under the state's high-risk insurance pool. The state also is working to determine if the Mississippi Comprehensive Health Insurance Risk Pool Association has the authority to lead the exchange (Kliff, Politico, 5/3).