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Report: State Spending Could Have ‘Huge Impact’ on Implementation of Health Care Law

Marketplace enrollment off to rocky start (May 5)

The Kaiser Family Foundation, in cooperation with the Washington Post, report that Florida is on course to spend $6 million to reach out to nearly 4 million uninsured people and to help them sign up for coverage in the federal health law’s online marketplace this fall.

Maryland will spend more than four times as much, or about $24.8 million, to help about 730,000 uninsured. The District of Columbia expects to spend about $9 million assisting 42,000 uninsured.

The wide variation in spending to hire and train people to provide consumer assistance in the first year of the new marketplaces could have a major effect on how many people actually obtain coverage under the Patient Protection and Affordable Care Act (PPACA), experts say.

And yet states with some of the nation’s highest uninsured rates, such as Florida and Texas, are receiving far less federal money per uninsured resident than states with low rates, such as Maryland, Vermont, and Rhode Island, according to a Kaiser Health News analysis.

That’s because states relying on the federal government to run their marketplaces are getting less money than states setting them up themselves because of how the health law was written. In addition, some states, such as Maryland, that are running their own operations are supplementing the federal dollars with state taxpayer funds.

“The spending difference could have a huge impact,” said Jon Kingsdale, a consultant who helped launch the Massachusetts health insurance exchange in 2006.

The biggest reason for the uneven spending on consumer assistance is that when Congress passed the health law in 2010, it assumed that most states would run the online marketplaces, and it authorized broad funding for that. As it turned out, only 16 states and the District of Columbia agreed to do so.

The law did not set aside money for the federal government to operate the marketplaces, either alone or in partnership with the states, as it is doing in at least 34 states. To remedy that, the Obama administration recently moved $54 million from the law’s prevention fund to provide money to hire and train people to assist consumers in those states, based on their numbers of uninsured.

That money will be awarded directly to organizations that agree to hire and train people to assist consumers. Those eligible include church groups, local health agencies, community health centers, and chambers of commerce.

“This is a huge challenge,” said Laura Goodhue, executive director of Florida CHAIN, a consumer advocacy group. “As community-based groups start to really plan and get ready for October, they are realizing just how difficult a job they will have and how the funding will only go so far.”

Source: Kaiser Family Foundation; May 5, 2013.

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