States surrender to health care law, set up exchanges

President Obama’s signature health care reforms are accelerating into the new year, with a growing number of state-run insurance markets getting the green light from the federal government, even as critics decry the law as a dagger to small businesses and a tea party icon attempts to repeal it for the 34th time.

In recent weeks, the U.S. Department of Health and Human Services has trumpeted its approval of health care “exchanges” — virtual marketplaces of insurance plans — that state officials will run on their own or in conjunction with the federal government. So far, 17 states and the District have obtained conditional approval for in-house exchanges.

On Thursday, officials provided conditional approval to state-based exchanges in California, Hawaii, Idaho, Nevada, New Mexico, Vermont and Utah, while Arkansas received conditional approval to operate an exchange in a state partnership with the federal government.

Other states, such as Virginia, decided to let the federal government run the exchanges for them, citing problems with the law or an inadequate amount of time to set up a state-based exchange after the U.S. Supreme Court upheld the law in June and Mr. Obama’s re-election dampened critics’ hopes for a repeal.

But Rep. Michele Bachmann, Minnesota Republican, appears to be undeterred by the law’s momentum. The former presidential candidate introduced a bill to repeal the Patient Protection and Affordable Care Act, commonly referred to as “Obamacare,” on the first day of the 113th Congress.

Nearly three dozen prior attempts have taken up “at least 80 hours on the House floor, or two full workweeks, since 2010,” according to a CBS News report in June. The measures are largely symbolic because the Democrat-controlled Senate would not support a repeal and Mr. Obama would veto the bill if it did.

Through a spokesman, Mrs. Bachmann decried portions of the health care law such as an excise tax on medical devices “that is pushing American companies overseas, taking their life-saving technology with them.”

“As Obamacare is further implemented, it will mean more job loss, less innovation, higher premiums and bigger government,” spokesman Dan Kotman said Friday. “This is still a bad bill, as the American people are finding out more and more, and it still needs to be repealed.”

Under the president’s reforms, the exchanges are supposed to be operation-ready by October so they can be activated at the start of 2014. States that opt for a partnership with the federal government have until Feb. 15 to submit their intentions and applications, according to the HHS.

Republican-led states tended to resist Mr. Obama’s reforms, but counterbalance their reservations with conservative principles that put state control over federal interference.

“Our options have come down to this: Do nothing and be at the federal government’s mercy in how that exchange is designed and run, or take a seat at the table and play the cards we’ve been dealt,” Idaho Gov. C.L. “Butch” Otter, a Republican, said last month in explaining his decision to run a state-based exchange.

Critics of the law say it could be especially onerous on businesses with roughly 50 employees. Some are declining to expand their workforces simply to avoid penalties for failing to provide adequate health insurance.

The law mandates that companies with 50 or more full-time employees that do not provide adequate health insurance must pay a penalty if their employees get tax credits to buy their own insurance, according to HHS. Large employers that do not offer coverage must pay $2,000 per full-time employee, beyond their first 30 workers.

Small-business advocates say companies flirting with the 50-employee threshold may lay off people or impose a hiring freeze.

Although the health care law does not take effect until 2014, some smaller employers are weighing their options now as the government takes stock of companies’ sizes, said Kevin Kuhlman, manager of legislative affairs for the National Federation of Independent Businesses.

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