States Given More Time to Seek U.S. Funds for Health Exchanges

States will get more chances to apply for U.S. aid to set up the online insurance exchanges included in health-care overhaul, and most will comply with the 2010 law, an Obama administration official said.

The Department of Health and Human Services extended today’s application deadline to Oct. 15, 2014, for a program that’s already given $850 million to 34 states and Washington, D.C. for the exchanges, where consumers can compare and buy medical plans. The administration may get as many as 10 more applications, said Mike Hash, interim director of the Center for Consumer Information and Insurance Oversight, on a call today.

The Supreme Court yesterday upheld the bulk of President Barack Obama’s Affordable Care Act, letting his administration proceed with the health law’s goal of extending coverage to 30 million uninsured people. HHS is ramping up its assistance so every state meets the law’s core provisions by 2014.

“What we can’t afford to do is spend time fighting any more political battles,” Health and Human Services Secretary Kathleen Sebelius said on the call.

Small businesses and 26 states had challenged the law’s requirements that all Americans have insurance and that states expand Medicaid, the government-subsidized health plans for the poor and disabled. The Supreme Court upheld the law with the caveat that the federal government can’t threaten to withhold existing Medicaid funds from states that don’t fully comply.

Due Dates

Hash said most states will comply with the Medicaid changes. About half of Obama’s health law’s insurance expansion would be covered by broadening Medicaid eligibility, while the rest would have people use tax credits to help buy coverage from private insurers through exchanges being set in each state.

Exchanges are meant to be one-stop shops where consumers can compare coverage information. The agency added 10 application due dates to the calendar for the grant program.

Twenty-seven states are actively building exchanges, according to Menlo Park, California-based nonprofit Kaiser Family Foundation. The remaining states had either never started them or had stopped work while waiting to see whether the Supreme Court would strike down the health law. The federal government will build exchanges in states that don’t comply.

To contact the reporter on this story: Anna Edney in Washington at aedney@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net