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Insurance Exchanges Will Be Ready by Deadline, Says Sebelius, Despite Funding Issue

By Melissa Attias, CQ Roll Call

April 12, 2013 -- Health and Human Services (HHS) Secretary Kathleen Sebelius repeatedly asserted last week that the health care law's insurance exchanges would open for business on time.

But she didn't elaborate on what would happen if Congress doesn't meet the Obama administration's request for an additional $1.5 billion in fiscal 2014 for a federally run exchange that is integral to the law.

And although it seems highly unlikely that Republicans would be willing to approve the extra funds, House Ways and Means Committee members didn't explicitly say that they wouldn't provide them.

Testifying before committee, Sebelius juggled a variety of questions spanning from Medicare to mental health to specific details about implementing the 2010 health care law (PL 111-148, PL 111-152).

Outlining the funding sources for the overhaul, Sebelius noted that the law appropriated $1 billion to her department for its implementation. She maintained that the amount was one-tenth of the administrative cost that was initially estimated by the Congressional Budget Office.

"I think we have done an extraordinary job, frankly, here in 2013, allocating and using judiciously the $1 billion that we had," she said.

About $230 million is left in that fund, she noted, which will be used with money from other sources in 2013. The administration is asking for another $1.5 billion in fiscal 2014 that she said would help get up and running both a data hub to coordinate eligibility information for the exchanges and a call center.

An HHS budget official also said a major use of the $1.5 billion would be for marketing and outreach for the federal exchange.

Indiana Republican Todd Young questioned whether HHS would be able to launch the exchanges by the January 2014 deadline if it did not receive the additional funds and asked for the department's contingency plans. But Sebelius said she was confident that the exchanges would launch on time, ready for open enrollment Oct. 1.

"The hub is basically built and paid for, and we'll be using the remaining resources that we have," she said. "We are using every opportunity we have to look at my transfer authority within HHS and the dollars that we have."

New York Democrat Charles B. Rangel returned to the issue later in the hearing, asking whether the assurances that the department is on track depends on some cooperation from Congress. Sebelius reiterated that administration is on track to implement the law on time.

Although it remains unclear how HHS would make do without the extra funding in fiscal 2014, it wouldn't be the first time that Congress failed to play along. The administration wanted an additional $949 million for the Centers for Medicare and Medicaid Services in fiscal 2013 that was expected to go toward implementing the exchanges, but the spending bill (PL 113-6) was cleared without the extra funds.

HHS officials said earlier this week that they expect to spend about $1.5 billion on the federal exchange in fiscal 2013 by piecing together funding from various sources, including the law's Prevention and Public Health Fund.

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