The Obamacare Money Congress Can’t Touch

Funding for the federal marketplace is limited, while states running their own exchanges have more access to government dollars.

US Health and Human Services Secretary Kathleen Sebelius testifies before the Senate Finance Committee on health insurance exchanges on November 6, 2013 in the Dirksen Senate Office on Capitol Hill in Washington, DC. AFP PHOTO/Mandel NGAN 
National Journal
Sophie Novack
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Sophie Novack
March 4, 2014, 10:31 a.m.

The White House is plan­ning to spend $6.4 bil­lion by the end of next year to sup­port Obama­care’s state health in­sur­ance ex­changes. And there’s noth­ing Con­gress can do to stop it.

Pres­id­ent Obama’s budget, re­leased Tues­day, shows that the gov­ern­ment has already spent al­most $4.3 bil­lion on grants to im­ple­ment state ex­changes between 2011 and 2013. About $28 mil­lion of this was spent on states that later op­ted out of build­ing their own ex­change, ac­cord­ing to a Kais­er Health News ana­lys­is.

Un­like the fed­er­al ex­changes, the ad­min­is­tra­tion has uni­lat­er­al au­thor­ity to fund the state ex­changes. Fund­ing for the fed­er­ally fa­cil­it­ated mar­ket­places, on the oth­er hand, is largely at the whims of Con­gress, where Re­pub­lic­ans have taken a hard­line against al­loc­at­ing money for the law.

In Demo­crats’ ori­gin­al vis­ion of the Af­ford­able Care Act, states were ex­pec­ted to es­tab­lish their own ex­changes, es­pe­cially with the ad­ded in­cent­ive of vir­tu­ally un­lim­ited fed­er­al dol­lars to do so. As a res­ult, fed­er­al dol­lars were not ori­gin­ally al­loc­ated to the im­ple­ment­a­tion of a fed­er­ally-fa­cil­it­ated mar­ket­place, leav­ing the feds scram­bling last year to piece to­geth­er money from oth­er parts of the budget.

Cur­rently 16 states plus D.C. are run­ning their own ex­changes, while the re­mainder are par­ti­cip­at­ing in the fed­er­ally run mar­ket­place. Yet only $1.5 bil­lion was spent on im­ple­ment­a­tion of the fed­er­al ex­change in 2013, com­pared with over $2.1 bil­lion on state ex­changes.

The Cen­ters for Medi­care & Medi­caid Ser­vices is ask­ing Con­gress for $629 mil­lion for mar­ket­place im­ple­ment­a­tion in 2015. The agency plans to col­lect $1.2 bil­lion in user fees from is­suers par­ti­cip­at­ing in the fed­er­al mar­ket­place that will off­set cost, bring­ing the total pro­gram spend­ing to $1.8 bil­lion in 2015.

“If Con­gress funds the pres­id­ent’s budget, this would fully fund the on­go­ing im­ple­ment­a­tion of the Af­ford­able Care Act, so we hope that they will in­deed fund it,” Health and Hu­man Ser­vices Sec­ret­ary Kath­leen Se­beli­us said in a press con­fer­ence Tues­day. “If Con­gress fails to pass a budget then we will look at vary­ing oth­er sources of fund­ing for the full im­ple­ment­a­tion.”

Get­ting this fund­ing ap­proved is not likely. The ad­min­is­tra­tion asked for ad­di­tion­al fund­ing for fed­er­al im­ple­ment­a­tion from Con­gress last year, but the re­quest was denied.

Ac­cord­ing to the latest en­roll­ment num­bers, about 1.4 mil­lion people have en­rolled in cov­er­age on state-based ex­changes, com­pared with 1.9 mil­lion on the fed­er­al ex­change.

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