- Associated Press - Thursday, February 20, 2014

TRENTON, N.J. (AP) - New Jersey’s officials are pressing the federal government for permission to use an expiring $7.6 million health overhaul grant as the state sees fit.

But it wasn’t immediately clear if a plea in a letter Wednesday from state Banking and Insurance Commissioner Kenneth Kobylowski would be enough to persuade U.S. Health and Human Services Commissioner Kathleen Sebelius to let New Jersey keep the funds after Thursday’s evening deadline passed.

“We have reached out to the state numerous times over the last few months in order to avoid a last minute scramble, but unfortunately the state has yet to send us a request to re-scope their grant for any allowable activities” Health and Human Services spokesman Fabien Levy said in a statement. “We are committed to working with New Jersey to support their efforts to successfully implement their marketplace.”

The federal government awarded the grant to the state two years ago to help plan a state health insurance exchange as part of President Barack Obama’s health insurance overhaul. But Gov. Chris Christie ultimately decided to let the federal government run the exchange in New Jersey.

U.S. Rep. Bill Pascrell says that only about $3,000 of the grant was spent for its intended purpose.

For months, health care advocates in New Jersey - including Pascrell - have lobbied the state to use the money to promote enrollment in plans now available under the health insurance overhaul. Besides programs on the exchange, which are available at subsidies for lower-income people, the state has also expanded Medicaid to provide coverage for more of the working poor, including those without children. The state has an estimated 900,000 residents without health insurance.

The governor’s office last year responded to questions about the suggestions by bashing New Jersey Policy Perspective, the liberal think tank that has called for the state to use the grant money on education and outreach.

But according to Kobylowski’s letter, which was made public Thursday, the state was pursuing permission to use the money primarily to staff up a call center to handle inquiries about health insurance options and also for data system, as well as other programs. He says answering calls “is fundamental to providing consumer education” and currently, despite some federal help, the state’s call center is still understaffed.

The commissioner says the state would permit only a portion of the spending plan.

Kobylowski tells Sebelius, “New Jersey consistently has sought the flexibility to use this grant to meet the unique needs of our residents and we have been advised repeatedly that the permissible uses for this grant are limited - highlighting a fundamental flaw of the Affordable Care Act, which is that when it comes to regulating health insurance markets, one size does not fit all.”

Raymond Castro, New Jersey Policy Perspective’s health insurance expert, called the state’s letter “disingenuous.”

“Where are New Jersey’s uninsured to turn?” Castro asked in a statement Thursday. “The state will not help them, and now it is clear nothing will be done to help the federal government reach them.”

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