$7.7 million coming to Iowa for health exchange

The Obama administration has awarded the state of Iowa more than $7.7 million to begin setting up a health insurance exchange, a central element of the controversial federal health care reform law.

The grant comes even as Iowa is one of the states challenging the law's constitutionality.

Obama administration officials said Tuesday that Iowa is one of 13 states that have been awarded a total of $220 million.

The administration said the state will use the funds for a “financial assessment and budget analysis to determine the financial resources required to provide assistance to individuals and small businesses, coverage appeals and complaints.”

It also will use the money to conduct focus groups and stakeholder outreach regarding program development.

“Around the country, states are getting to work,” Health and Human Services Secretary Kathleen Sebelius said on a conference call with reporters.

She said more than half the states have made “significant progress” toward creating the exchanges.

Twenty-nine states now have received such grants. Rhode Island, the only state to have received two grants so far, is farther along in the planning than the others.

Even though the administration says Iowa is among the states making “significant progress,” the state Legislature has yet to pass a law setting up its exchange. In fact, Gov. Terry Branstad has joined other Republican governors in challenging the law's constitutionality.

Several states that are doing so received grants.

Tim Albrecht, a spokesman for the governor, said Tuesday that Branstad thinks “that the government takeover of health care is unworkable and unaffordable for states” and the lawsuit will be successful.

If not, “we need to manage and implement specific solutions for Iowa's extensive needs, rather than a federally mandated, one-size-fits-all exchange,” he added.

If states don't design their own exchanges, the federal government will take the lead in doing so.

The health care reform law, which went into effect last year, requires that the marketplaces be operational by 2014. Enrollment is scheduled to begin the previous October, which is less than two years away.

In her remarks to reporters, Sebelius said the grant process is evidence that states are being given the flexibility within the existing law to design their own systems.

She said additional grant opportunities and guidance are being given to allow for flexibility.

“I know the importance of letting states lead,” Sebelius said, citing her experience as a former governor, state insurance commissioner and legislator.