HHS may have to get ‘creative’ on exchange (PPACA has no funding for federal exchange?)

[antigop]

http://www.politico.com/news/stories/0811/61513_Page2.html

While sorting out the policy kinks in setting up a federal exchange, HHS must tackle another problem: There is no money to pay for it.

A quirk in the Affordable Care Act is that while it gives HHS the authority to create a federal exchange for states that don’t set up their own, it doesn’t actually provide any funding to do so. By contrast, the law appropriates essentially unlimited sums for helping states create their own exchanges.

he lack of funding for a federal exchange complicates what is already a difficult task. HHS will likely be operating exchanges in states like Louisiana and Florida that oppose the ACA on principle and have said they will not comply with the exchange provisions. But HHS also will likely be responsible for several other states that may want to set up exchanges, but will be unable to enact laws and set up the infrastructure under the short time frame specified by the law.

A federal exchange will have the same authority states do to impose fees on insurance sold through the exchange once it is open for business. But there is no money coming in until people start purchasing insurance, and there is a great deal of work to be done to prepare to open the doors of federal exchanges.

The article is from August, 2011 -- are there any updates regarding funding?

[drm604]

1. The article gives some possible workarounds.

For example, money can be moved from one area of the program to another.

And there's this:

“What you’d have to do is probably get creative about the financing,” perhaps enticing contractors to do development for free in the expectation that they would get paid once the exchange started collecting fees, Kingsdale said.

So, for example, you could give Blue Cross the right to administer an exchange for all or part of a state in return for them eating, or at least postponing, the start up costs, which probably wouldn't be all that major since they already have infrastructure in place.

[antigop]

2. true... it does give workarounds...but seems kind of dumb that there was no funding included n/t

[drm604]

3. They probably didn't think it would actually be needed

Last edited Mon Jul 2, 2012, 02:50 PM - Edit history (1)

since no state would want to give up medicaid funding. SCOTUS changed all that with their ruling, and now there's a problem.

Edited to add: Oops, I was confusing exchanges (which is what this thread is about) with Medicaid expansion (which is what the SCOTUS ruling was about). They're two different things, so the SCOTUS ruling has nothing to do with this.

[antigop]

4. Yes, exactly. And some states have said they will not put up an exchange n/t

[elleng]

6. 'Dumb,' or another legislative difficulty?

[alc]

5. another problem with federal vs state exchanges

The ACA provides tax credits (based on need) for state exchanges, not federal. This link has a good description of how it's likely a drafting error and nobody would be in position to sue to stop the HHS from funding the tax credits anyhow.

http://www.healthreformwatch.com/2011/09/11/yes-the-federal-exchange-can-offer-premium-tax-credits/

But, it (and others) don't consider the possibility that a Republican HHS could choose to stop the tax credit (no law suit needed). The law does not say the tax credit must be provided as it does for state exchanges. Would Congress fix the error? Probably not unless Democrats control Congress. And a Republican president would likely veto any how. Will the courts recognize the drafting error and allow what seems to be implied (e.g. federal exchanges are the same as states)? There is precedence for that but there's no guarantee.


We're a long way from this thing being sorted out and Republicans can cause problems every step of the way.

[elleng]

7. And they WILL cause problems.

[HooptieWagon]

8. Bill the states that refuse to create an exchange.

Im from Florida... although we taxpayers would end up footing the bill, it would be fine to have Scott and the neanderthal Rs in Tally put on the spot for their obstructionism and procrastination.

[Bill USA]

9. here's an idea: for those states that don't want to participate in ACA then we will assume they

will feel their freedoms are hampered by us taxpayers funding the Disproportionate Share Hospital program for them too. This is the program whereby hospitals are reimbursed for providing health care to those who can't pay for it (i.e. don't have medical insurance).

So we, out of respect for their wishes to not be helped by the community (the USA), will stop sending DSH money to hospitals in their states. This would provide money to fund the federally provided exchanges for these states.