Feds Sidestep Stubborn GOP Govs to Build Health Insurance Exchanges

Secretary of the U.S. Department of Health and Human Services Kathleen Sebelius (Getty Images)


WASHINGTON -- Don't look now: The feds may be outmaneuvering GOP governors who've balked at carrying out a key part of President Barack Obama's health care overhaul law.

Opponents of the law say they won't set up new private health insurance markets called exchanges. But increasingly it's looking like Washington will just do it for them.

That means federal officials could be calling the shots on some insurance issues that states traditionally manage, from handling consumer complaints to regulating plans that will serve many citizens.

Unless Mitt Romney wins in November, that could turn into a political debacle for those dug in to fight what they denounce as "Obamacare."

"You're kind of rolling the dice if you think [Obama's health care law] will go away," said Kansas Insurance Commissioner Sandy Praeger, a Republican. If Romney either doesn't win or does, but can't make good on his vow to repeal the overhaul, "you are just giving up a lot of authority."

The law envisioned that states would run the new markets, or exchanges, with federal control as a fallback only. But that fallback now looks as if it will become the standard option in about half the states -- at least initially.

It would happen through something called the federal exchange, humming along largely under wraps on a tight development schedule overseen by the Health and Human Services Department in Washington.

Exchanges are online markets in which individual consumers and small businesses will shop for health insurance among competing private plans. The Supreme Court's health care decision left both state exchanges and the federal option in place.

The exchanges are supposed to demystify the process of buying health insurance, allowing consumers to make apples-to-apples comparisons. Consumers will also be able to find out whether they're eligible for new federal subsidies to help pay premiums, or whether they qualify for expanded Medicaid.

It's all supposed to work in real time, or close to it, like online travel services. Open enrollment would start a little over a year from now, on Oct. 1, 2013, with coverage kicking in the following Jan. 1.

Eventually more than 25 million people are expected to get coverage through exchanges, including many who were previously uninsured. As exchanges attract more customers, competition among insurance plans could help keep costs in check.

But only 14 states and Washington, D.C., have adopted plans for their own exchanges: California, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Nevada, New York, Oregon, Rhode Island, Utah, Vermont, Washington and West Virginia. Some could still backtrack.

Kentucky and Minnesota are pushing forward with their own exchanges, and others may be able to partner with the federal government. States face a Jan. 1, 2013, deadline for Washington to sign off on their plans.

Meanwhile, development of the federal exchange is advancing.

HHS contractors are working feverishly to design and test computer systems that would make the federal exchange come alive. It's a top priority for the Obama administration, which is guarding the details closely. Estimated price tag: at least $860 million.

The government is "on track in moving aggressively to set up this market structure," Mike Hash, the HHS official overseeing the effort, told industry representatives, state officials and public policy experts at a recent Bipartisan Policy Center conference. "We're on track ... to go live in the fall of 2013."

"I think the pressure is on them to deliver, and I fully expect they will," said Jon Kingsdale, who was the founding director of the nation's first health insurance exchange, created under then-Gov. Romney's health care overhaul in Massachusetts.

Now a consultant to states, Kingsdale says he expects the federal exchange to look very much like the one already operating in his home state.

There will be a website, and you'll be able to put in your ZIP code and get a list of available health plans. There will be a section where you can find out whether you qualify for subsidies, or whether you might need to look at Medicaid. There will be cost calculators to allow you to compare different levels of coverage: platinum, gold, silver and bronze. There will be tools that allow you to see whether your doctor or hospital is with a particular plan.

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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If the new health care plan is going to make things better and more FAIR for Americans why are so many Americans against the plan? If 500 billion or more is going to be saved in medicare costs why don't they implement the savings now? Medicare is not free nor is it an entitlement. With the up front deductions taken from my Social Security plus the cost of my supplemental plan and other necessary things I must pay for. My cost last year was almost $6,000 dollars and I did not spend any time in a hospital. Why not implement Tort Reform? The lawyers really make more money than is fair from medical lawsuits. This must be true, those TV commercials and newspaper ads cost a lot of money. Why have so many entities been allowed to "opt out" of some of the provisions of the plan? Why do so many doctors I see on television say that intend to find another profession? Have any of you folks that read this thought about who is going to treat those 30 million new patients that will be added to the system? The Obama team must be celebrating this article. This free ad for ObamaCare will possibly sway the minds of many voters. The "True Believers' have already made up their minds. A wise man once said "A True Believer is a person that has been presented with many proven facts about a particular person or a program that is factually untrue. The "True Believer cannot believe the truth when presented with it. An Example: Jim Jones preaching, drinking "Kool Aid" That killed over 200 folks. For those of you that do not remember Jim Jones. 200 folks drank poison and died following Jim Jones and his radical religious teaching.


August 21 2012 at 11:32 PM Report abuse rate up rate down Reply

Those "STUBBORN" GOP govs! How dare they defy the "Annointed One", "Dear Leader", and "Great Uniter"? LOL!

Obamacare is a disaster for the States, and those governnors are saving their citizens from the totalitarian policies of an extreme-left anti-democatic president.

Obama has been busy gutting every Federal law by illegal and un-American executive orders: "Cap and Trade" energy taxes, onerous EPA regulations, illegal immigrant deportations, Defense of Marriage Act, denial of the oil pipeline, etc .....

The "stubborn" GOP governors are protecting their States from massively expensive and burdensome "regulations" Obama is trying to foist on the country ..

August 11 2012 at 6:05 AM Report abuse +2 rate up rate down Reply

Why is Mitt running?
I deferred military service for bicycling in France.
I lived in a 5bedroom house while there, with a chef/ housekeeper and houseboy.
I claimed I lived like poor people then.
I spent the duration of the Vietnam War, proselytizing and converting people to my faith.

At Bain when I became the CEO; I turned the company from venture capital into a corporate raider.
I drove many companies bankrupt after stripping them of their assets and selling them.
I acquired Damon Corps medical labs and while there the company defrauded Medicare to the tune of 100s of millions. When I left the company was bankrupt and 1000 people lost their jobs.
I oversaw the second biggest Medicare fraud in History; just behind my friend Rick Scott’s who is trying to steal Florida for me.
I lay off more than 10’s thousand living, breathing people, solely to line my own pocket.
I enjoy firing people.
Of the companies I didn’t completely bankrupt, I drove 10,000s of people with livable wages into accepting minimum wage and told every single one, if they don’t like it they could leave.
At the same time I gave top management huge pay raises.
I created 10,000s of jobs on foreign shores and people who worked for me there, earned a couple dollars a day, See Global tech. China and Haier Electricals China.
I retired...
I pay 13%; in taxes on unhidden money which until it became illegal in 2011 I hid in tax havens.
I had the third lowest employment rate in any state in America as governor.
While I was governor, I used the Heritage Foundation’s Healthcare plan and created Romneycare’.
It lowered the insurance costs for Massachusetts by 1/3 since introduction.
I was proud when President Obama decided to use the plan, as I thought it would help my chances of becoming President but it was vilified by my party on purely political grounds, so backed away from it.
I cost the state $200000 when I left by replacing all of the states government computers to hide my record.

I think corporations are people but if you look at my history, you’ll find I don’t think people are worth telling the truth.

I have made $1/4billion by destroying thousands of lives.
I don’t care about any of those lives, and as you can see, I have no intentions of being honest with them.
I spent $200.000.000 to beat the weakest and most bizarre field ever in rightwing politics.
Those candidates warned you about me,Type your comment here

August 10 2012 at 10:51 PM Report abuse rate up rate down Reply

New Study: Bush Policies, Not Obama, Responsible for US Deficit
Romney repeatedly accuses the president of “runaway spending” and of “creating a prairie fire of debt.” While one in depth study shows that spending under Obama never happened, a new study reveals that Bush-era policies are primarily responsible for our burgeoning deficit.

This past Thursday, the Center on Budget and Policy Priorities (CBPP) analysis revealed that the Bush tax cuts, the wars in Afghanistan and Iraq, and Bush’s Great Recession account for virtually the entire federal budget deficit.


August 09 2012 at 3:47 PM Report abuse +4 rate up rate down Reply


Romney signed lndividual mandate as Gov of Mass 2006 - DEFENDED it in 2008
TODAY: Romney opposes lndividual Mandate he initiated

2. lNDlVlDUAL MANDATE (again).

JUST TWO YEARS AGO: Supported a Federal lndividual Mandate.
TODAY: Romney opposes an lndividual Mandate


2003: Created Green Energy fund, to support alternative energy sources.
TODAY: He opposes green-energy and criticizes Obama for supporting it.

4. lMMlGRATl0N

2006 Romney supports path to citizenship for law-abiding iIIegal lmmigrants.
2012: Force iIIegal lmmigrants to self "DEP0RT" by making their Iives miserabIe.
2012: RYAN-ROMNEY-PETERSON sIashs border control funding - ZERO iIIegals.


Raised Property Taxes and Corporate taxes AS GOVERNOR OF MASS
TODAY: Romney opposes new taxes on RlCHEST & Corporations but Taxes 99%

6. AB0RTl0N:

2002: "I will preserve and protect a W0MAN’s right to CH00SE."
TODAY: 0pposes


1994: "I was not planning on signing up for the military - to serve in VlETNAM." B0ST0N HeraId.
2007: Wishes he had served. But had a Great time in France!


1994:I am to the left of Ted Kennedy on gay rights/issues. Aug. 25, 1994: "authorization of marriage on a same-sex basis falls under state jurisdiction."

June 13, 2010: Supports a constitutional amendment to ban gay marriage.

2012:Romney doesn't support gay marriage or civil unions for lgbt people; doesn't even support civil unions for heterosexual couples now.

August 09 2012 at 12:10 PM Report abuse +1 rate up rate down Reply
1 reply to chris1011's comment

Huff & Puffs copying and paste poster child strikes again.

August 09 2012 at 1:50 PM Report abuse -1 rate up rate down Reply

Dearest Diary;
For Pete’s sake it was never meant to be like this.
I was meant to win on Romneycare but my own party sabotaged me.
Ihave the hair, the Grecian formula look with the deliberate distinguished white temples. The picture postcard family that looks anachronistically odd and associates with shady business people; but could pass as the virtuous looking version of the Osmond’s.
I’ma job creator damn it, a successful tycoon so why aren’t you all takingthat on face value and bowing and scraping as I’m use to?
Why must you pry and pry until I’m too embarrassed to run on my planned lies and woefully flat singing.
It’sun-American of you all to expose my very shallow veneer of lies that I lovingly crafted over the decades for my vanity run for president damn it.
I even fired the best, cheap team of illegal-aliens I ever had working on my garden in one of my many blue state located homes, I hope they’re available next year? (Seriously, you wouldn’t expect me to live in a red state would you, they’re so backward and fullof uncouth people).
Life’s so unfair and if I was born with emotions I’d be devastated at how short a time my cleverly crafted illusion took to crumble and vanish.
Who’d have thought journalists paid by my major backers would collude in telling the truth about me. I feel betrayed now on all sides.
I can’t even run on my term as governor because that’s full of landmines buried barely beneath the surface and if I place the toe of one of my Gucci loafers inthat direction. Boom! Just like Wile. E. Coyote and Obama going meep! meep! As he speeds off!
It was never meant to be like this. I have the rugged good looks of a President of America in a made for TV Canadian movie.
I’veturned off the entire African American, Latino and Center of America and most women especially when I followed it up by calling them freeloaders after free stuff on several occasions.
How come every insult and duplicity I make gets reported on? It’s like someone invented a machine that can record sound and even motion pictures.
Anyway I’m going to stay in denial and keep saying the irrefutable truth is a lie. Because I’m Mitt Romney, CEO, born into privilege and no upstart with integrity is going to besmirch my name. Especially with the truth!
Me 2012
Because it’s my turn.

August 09 2012 at 12:09 PM Report abuse +2 rate up rate down Reply
1 reply to chris1011's comment

This is the kind of stuff a kindergartener like Chrissy post.

August 09 2012 at 1:51 PM Report abuse -1 rate up rate down Reply

scary stuff, 800 million secret computers, no comment to questions, non response, messages left, never returned, IRS,
and kathleen in charge.
Life is so lonely .I am an older successful single man at present .I need a woman who can love me back .I also uploaded my hot photos on..RichWoo.C0M..under the name of Craig..the largest and best club for seeking CEOs, successful and sexy people. .if you girls see this comment,i hope you will check my photos out there.maybe you are the one whom i’m looking for!!LOL

August 09 2012 at 3:43 AM Report abuse rate up rate down Reply

I like most, don't understand the impact of this program. I clicked on the link in the article that discussed Obamacare myth's. I read through it keeping an open mind. One thing that I already knew was that my current insurance coverage is pathetic. I am definitely paying for uninsured visitors using the emergency rooms. I don't listen to politicians or pundits. They all have their own agenda. The article helped clarify a few myths for me. It is worth reading.

August 08 2012 at 8:08 AM Report abuse +1 rate up rate down Reply
1 reply to bassidan's comment


August 08 2012 at 3:49 PM Report abuse -3 rate up rate down Reply

scary stuff, 800 million secret computers, no comment to questions, non response, messages left, never returned, IRS,
and kathleen in charge.

August 08 2012 at 8:06 AM Report abuse -1 rate up rate down Reply

Shove this plan down the people's throats anyway possible. Arm twisting socialism and we the people let it happen. Blame ourselves for allowing radicals to run our White House.

August 08 2012 at 6:48 AM Report abuse -5 rate up rate down Reply