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Friday September 4th, 2015 8:31AM

Clock ticking for states to adopt health exchanges

By The Associated Press
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CHICAGO (AP) -- For the more than 30 states that defaulted to the federal government under President Barack Obama's health care law, time may be running out to decide whether to create their own state-run insurance exchanges.

With the chance to apply for hundreds of millions of dollars in federal help set to expire in a few months, even Obama's home state of Illinois is expressing little interest in taking the next step. The law's disastrous rollout and lingering unpopularity have made it risky to raise the issue in a tense election year despite Obama's announcement Thursday that 8 million Americans have signed up for subsidized private insurance.

Health care advocates are pushing the Democrats who control the Illinois Legislature to pass a measure enabling a state exchange. They note many states already running their own were able to enroll customers at a faster clip and will have more opportunity to scrutinize insurance rate increases for their residents.

But it has barely been mentioned in the state capital of Springfield, with just weeks left to take action before the Legislature adjourns.

"The Democrats run this state. President Obama's from Illinois. It's up to them to do it," said Jim Duffett of the Campaign for Better Health Care, a nonprofit coalition that has been helping Illinois residents sign up for coverage. "Who's in power makes a difference; you can't hide from it anymore."

Many of the remaining states that declined to adopt their own exchanges are controlled by Republicans, some of whom want to eliminate what they call "Obamacare." But Sonya Schwartz of the Georgetown University Health Policy Institute, which has been tracking states' implementation of the health law, puts Illinois at the top of a list of states more likely to approve an exchange. Her list also includes Iowa, Arkansas, Michigan, West Virginia, New Hampshire and Delaware.

But the same reluctance is holding back many of those states, despite a November deadline to get access to funds to help secure a state exchange, with in Illinois' case could mean up to $500 million. In Michigan, Republican Gov. Rick Snyder prefers creating a state-run exchange, but has been rebuffed by the GOP-controlled Legislature. In Iowa, where the health care law is expected to be a big issue in a U.S. Senate race, the Legislature is expected to adjourn soon without any action on a state-run exchange.

In Illinois, Republicans are expected to exploit the health law's problems in election campaigns against incumbent Democrats in Congress, including Dick Durbin, the No. 2 Democrat in the U.S. Senate.

The governor's race, between incumbent Democrat Pat Quinn and his Republican opponent, wealthy businessman Bruce Rauner, is expected to be one of the most hotly contested in the nation.

While state lawmakers have less connection to the federal law, the idea of any state measure associated with the Affordable Care Act remains unpopular with both parties, said Pat Brady, a former Illinois GOP chairman.

"A lot of people don't want to have their names associated with it," Brady said.

The health care law was designed for each state to run its own insurance marketplace, but just 16 states and Washington, D.C., opted to do so. The federal government ended up running exchanges for the other states, plus Idaho and New Mexico, which ran out of time to fully implement their own exchanges.

Illinois and a handful of other states formed partnerships with the federal government, a hybrid model that allowed the states access to a first level of federal grants. In Illinois, that totaled nearly $154 million, roughly half of which has been spent or committed to outreach workers, advertising, a telephone help desk and analysis of health insurance plans.

With a few notable exceptions, state-run exchanges outpaced the ones run by the federal government. The Oregon exchange's technology glitches forced people to sign up using a time-consuming hybrid paper-online process. Earlier this month, Maryland chose to replace its glitch-filled exchange with technology from Connecticut at an estimated cost of $40 million to $50 million.

Time is now running out for the final round of federal grant funding, which requires state enabling legislation or a governor's executive order. The grants can't be awarded after Jan. 1, 2015, and federal rules set Nov. 14 as the deadline for states to apply.

"This is your last chance to pull this off," Schwartz said.

However, many state legislatures will soon adjourn their spring sessions, leaving election-minded lawmakers free to go home and campaign until November.

In Illinois, Duffett's group is trying to collect pledges of support from lawmakers to persuade Democratic leaders to introduce a bill creating an exchange before lawmakers adjourn on May 31. But a spokesman for House Speaker Michael Madigan, who is also the state Democratic Party chairman, acknowledged a lack of "real interest" in pursuing an exchange but wouldn't rule it out "if a consensus would develop."

Christopher Mooney, director of the University of Illinois' Institute of Government and Public Affairs, said the health law is "probably" more popular in Obama's home state than elsewhere, and that individual state lawmakers know whether their smaller districts either support or oppose it. But he said legislators normally like to avoid "unpleasant stuff," especially in an election year.

"It's such a polarizing issue, I can easily imagine them saying, `Why bother?'" Mooney said.
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