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California may be thwarted by House GOP

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California has moved quickly to implement key provisions of the federal health care overhaul law, including a health benefits exchange, but the exchange - and California's plans - could be vulnerable as House Republicans threaten to starve the federal health program of funding. Last month, California became the first state to begin establishing a state-run health insurance exchange - California Health Benefit Exchange - that is supposed to open for business by 2014 to help millions of the state's uninsured obtain health insurance.

The U.S. Department of Health and Human Services has given the state $1 million - with possibly more funding to come, federal officials said - to help set up the exchange. But the prospect of additional federal funding could face intense scrutiny by congressional Republicans seeking to cinch up congressional purse strings. Republican control of the House "could make things very messy. Actually, it's already very messy," said professor John Ellwood of the Goldman School of Public Policy at UC Berkeley, a former special assistant at the Congressional Budget Office. "If something requires an appropriation" of federal funds, "that's where the Republicans will attempt to starve it," Ellwood said.

The federal government expects to spend nearly $1 trillion over the next 10 years to implement the health care package - much of it already appropriated when the legislation was signed into law by President Barack Obama in the spring. There still is ambiguity in the funding process because at least $115 billion in discretionary funding to implement key requirements of the program still needs approval by Congress. It could cost the Internal Revenue Service as much as $10 billion over 10 years to determine eligibility for tax credits used to purchase coverage through the exchange. And it could cost Health and Human Services another $10 billion over a decade to implement changes in health insurance programs for seniors, the poor and children.

"I think it would be ill-advised for California to move forward to implement Obamacare," said Rep. Tom McClintock, R-Elk Grove, who wants the federal health care law repealed. "Unless the state is anticipating a miraculous revenue windfall, it better be careful about committing additional dollars."

There may be little Republicans can do to take back the $5 billion already appropriated to help states set up insurance exchanges, the virtual marketplace that will allow the uninsured and those eligible for tax credits to purchase health insurance. It's still unclear how much it will cost California to set up its exchange and it will remain so until a five-member oversight board can be installed to begin designing how the exchange would work. Billions of dollars are at stake for California, including $13.8 billion in tax credits that would flow through the exchange to cover 3.5 million Californians.

Some provisions of the law already are being rolled out. Adult children up to 26 years old can now be included as dependents on their parents' health policies. And insurers cannot deny coverage to children with pre-existing health conditions.

While the GOP doesn't have the votes to repeal the overhaul law, it now has vast power to block funding for many programs that states like California are already banking on.
"The idea that everything is hunky-dory is all wrong. You've got between now and 2014 to get this massive thing off the ground," said John R. Graham, director of health care studies at the Pacific Research Institute, a conservative think tank based in San Francisco. "You'll need people ... and you can't do anything if you don't have the money to pay people to get it off the ground."

Backers of health care reform say Republicans are overstating their ability to halt the overhaul package. They might have won control of the House, but Democrats retained control of the Senate. "The Republicans in Congress cannot change the law, because they need the Senate to go along," said Ken Jacobs, who chairs the Labor Center at UC Berkeley and an overhaul advocate. "The law is in place, and we need to move forward toward implementation," Jacobs said. "To the degree that it will be up to states to move toward implementation, the ball keeps rolling." That's likely the case in places like California that are controlled by Democrats.

At least 21 Republican-controlled states have challenged the health care law, which was a lightning-rod issue in last week's midterm elections that gave the GOP control of the House of Representatives.

Posted By Bobby Caina Calvan
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