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A Republican rift on health exchanges

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KAISER FAMILY FOUNDATION The Obama administration has spent $729 million laying the groundwork for health insurance exchanges, according to a White House report published this morning. That number will likely tip over $1 billion in the coming months, as states continue setting up the new marketplaces where Americans will shop for health insurance beginning in 2014. As the above map from the Kaiser Family Foundation illustrates, states are pretty much all over the place on exchanges right now. Fourteen have established marketplaces and another five intend to do so. Then, there are the less active states: 22 states continue to study their options, while two have decided not to do anything at all.

The report shows what the administration’s spending has purchased: Buy-in on implementation from states that aren’t exactly fans of the Affordable Care Act. Twenty-eight states have received multimillion-dollar “exchange establishment” grants to get started on the heavy lifting of building a health insurance marketplace. Half of those states have Republican governors, a few of whom have embraced the idea of health insurance exchanges enthusiastically.

“What we’re trying to do here is set up an Alabama health insurance exchange so people in the state, regardless of where you are in life – whether you are a young mother or whether you are college student or whether you are an elderly person with a preexisting disease – you will be able to purchase insurance,” Alabama Gov. Robert Bentley, a Republican, told a local paper late last year.

What the White House doesn’t highlight are states that haven’t bought in — those that have resolutely resisted setting up an exchange. Florida, Louisiana, Texas and others have committed to not moving forward on implementation until the Supreme Court rules on the health reform law’s constitutionality. Two years after the health reform law passed, many states are taking a wait-and-see approach: As the above map shows, 22 states are still studying their options on health insurance exchanges.

Ultimately, we’re seeing a rift within the Republican party over whether to implement the health insurance exchanges. Some support implementing the law and retaining more power as it moves forward, as the federal government can step in and set up exchanges in states that don’t move forward on their own. Other states, however, want to completely opt of implementing a law they believe to be unconstitutional.

“We’ve encouraged states to move forward and towards an exchange,” one administration official told reporters on a call this morning. “Every day that passes is one less day to build an exchange.”

The biggest test will come at the end of this year. In January 2013, the Obama administration has to certify whether or not a state has made enough progress to run its own exchange. If it hasn’t, Health and Human Services will come in and do the task itself. That’s when the still-recalcitrant states will have to make a final decision on whether to opt in or opt out.

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