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HHS To Governors: You Have Flexibility On Health Reform Implementation

Feb 25, 2011

With the nation’s governors about to descend on Washington for their winter meeting, the Department of Health and Human Services today continued its campaign to calm their concerns that the health law is too expensive and complex for cash-strapped states to implement.

In a letter responding to Republican governors who have been complaining they need more flexibility in setting up health insurance exchanges, HHS Secretary Kathleen Sebelius reiterated that the law gives states the authority to pick which insurers can do business in their states and allows for a diversity of health plans to be sold on the exchanges.

In a separate report, HHS said that the federal government has offered or provided $2.8 billion so far -- and will provide "billions more" -- to states to implement the law, including two key provisions: the exchanges, or marketplaces, where consumers can purchase insurance, and the sharp expansion of Medicaid in 2014.

The new letter from Sebelius follows other moves by HHS to soothe governors as they struggle to balance their budgets in a poor economy. On Thursday, HHS officials announced nearly $200 million in new grant funds to help states oversee insurers’ rate increases. On Tuesday, agency officials also announced that $4.3 billion in new funds were available for states to help move Medicaid recipients out of institutions and into their own homes or other community settings.

To help states figure out how to save money in their Medicaid programs, the administration also has deployed teams of in-house experts to find savings.

Earlier this month, the administration circulated a memo detailing how states could determine which insurers could offer coverage in the exchanges and how states could tailor Medicaid plans to "mirror options available in the private market." Sebelius’ letter today to the GOP governors made similar points.

The National Governors Association winter meeting starts tomorrow in Washington.

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