Federal Responses May Determine Christie Decision on Health Exchanges

Andrew Kitchenman | November 19, 2012 | Health Care
Letter from Republican governors poses more than a dozen questions to Obama administration

Gov. Chris Christie wants more information from the federal government before he decides if New Jersey is going to opt for a state-run health benefit exchange.

But it’s not clear whether the information the feds supply will satisfy him.

Whatever his decision, Christie will have more time to make it. In a letter to his fellow Republican governors on Thursday, US Health and Human Services Secretary Kathleen Sebelius wrote that states could submit both a letter of intent and an application to operate their own exchanges by December 14 — rather than the original November 16 deadline.

The extension reflects a federal effort to coax resistant state officials into supporting exchanges.

Actually, Christie faces a tighter deadline than the one set by HHS. He has until December 6 to sign or veto a bill establishing a state exchange passed by the Legislature.

New Jersey matched the national average in the portion of its population that was uninsured in 2011 — 16 percent of 8.69 million people, according to the Kaiser Family Foundation. The state has been awarded $1.22 million from the federal government in grants to plan for an exchange.

Christie said on Friday that his decision on whether to have a state-run exchange would hinge on the Obama administration’s answers to Republican governors on exchange costs, according to the Associated Press.

The Republican Governors Association submitted a letter in July with 17 questions about the exchanges and 13 questions about the proposed expansion of Medicaid.

The letter included questions about potential costs of state-federal partnerships; how federally run exchanges will operate; and how the administration plans to pay for exchanges when Republican members of Congress have said they would block funding.

Virginia Gov. Bob McDonnell, the outgoing RGA chairman, reiterated his request for responses to those questions in a letter earlier this month.

Sebelius wrote in her letter that federal officials would be providing more information about the healthcare law “in the coming days and weeks, and our team will do everything possible to answer questions and provide technical assistance to state leaders.”

Sebelius emphasized federal sensitivity to state concerns.

“Giving states the flexibility they need has been a critical principle in our work to implement the Affordable Care Act since it was signed into law more than two years ago,” Sebelius wrote in the response addressed to McDonnell and incoming RGA chairman Louisiana Gov. Bobby Jindal.

Under the Affordable Care Act, each state must determine whether it will operate its own exchange, an online market for consumers and small businesses to buy health insurance. The exchanges are scheduled to launch on January 1, 2014, with enrollment beginning October 1, 2013. Residents with incomes between 100 percent and 400 percent of the federal poverty line, currently $23,050 to $92,200 for a family of four, are eligible for subsidies to buy coverage.

States have three options: an entirely state-run exchange, a federally operated exchange, or a state-federal partnership. The deadline to inform federal officials about a state-federal partnership is February 15.

Unlike most Republican governors, Christie hasn’t announced that the state will pass on the option to operate its own exchange. But the debate in New Jersey has largely reflected the national struggle over the issues, with Democratic legislators pushing for immediate enactment of a state exchange and Republicans taking a wait-and-see approach.

Sen. Joseph Vitale (D-Middlesex), cosponsor of the bill that would establish a state-run exchange, said he wasn’t surprised that the federal government pushed back the deadline for states to make a decision.

“I think time is of the essence, but it gives states a little more time,” Vitale said. “We need to get this done right away. “

Vitale said that if Christie’s decision is based on costs, “then we should run a state-run or a federal-state partnership.” He added that putting a state-managed plan in place would save lives. “It’s prudent to move forward now. A federal exchange is not in our state’s interest.”

Christie vetoed an earlier version of the exchange bill in May. The new version incorporates some of his criticisms, including dropping a provision that would have paid members of the exchange board $50,000 a year. .

Seton Hall University health law professor John V. Jacobi noted that the deadline postponement was in keeping with the federal government’s approach to working with state officials on the healthcare law. McDonnell had asked for a delay in the deadline.

“I think in many states there was a bit of a moratorium as everyone waited to see what was going to happen in the November elections,” Jacobi said, adding that the Obama administration is more focused on “trying to get the reforms moving forward than on having their feelings hurt” by Republican criticism.

According to Kaiser Health News, New Jersey is one of only seven states that haven’t decided what form their exchanges will take. The others are Arizona, Florida, Idaho, Oklahoma, Pennsylvania, and Tennessee.