NJ Loses $7.6 Million In Obamacare Aid As Grant Expires

The Record ( — Friday, February 21, 2014

The Record

New Jersey's insurance commissioner sought an 11th hour reprieve from the federal government as a $7.6-million grant for marketing the new insurance marketplace under the Affordable Care Act was due to sunset on Wednesday.

Insurance Commissioner Kenneth E. Kobylowski asked for "reconsideration and flexibility... to repurpose this grant in a manner that best meets our state's needs," in a letter to Health and Human Services Secretary Kathleen Sibelius.

But it was too little too late.

"Unfortunately the state has yet to send us a request to re-scope their grant for any allowable activities," said Courtney Jenkins, a spokeswoman for the federal health and human services department. Federal officials said the grant would expire at the close of business on Thursday if New Jersey did not put forward an acceptable plan.

"We have always made clear to the State of New Jersey, we are eager to work with them to re-scope their grant for activities that are allowable under the law," said Jenkins. "We have reached out to the state numerous times over the last few months in order to avoid a last minute scramble."

The state's proposal to use the money to support Medicaid enrollment, rather than insurance enrollment through the new, subsidized federal marketplace, was not acceptable, federal officials said.

The state has long sought approval to use the grant to add operators at a call center that handles questions from people about Medicaid; to track people with chronic infectious diseases, such as HIV, and advise them of their insurance options when they fall out of insurance; and to improve the computer connectivity between the federal web site and New Jersey Medicaid, Kobylowski's letter said.

But those "common-sense" proposals have been rejected, according to the letter Kobylowski sent Wednesday and released Thursday.

Echoing the Republican critique of the health care law, Kobylowski wrote that the federal government's denials of New Jersey's requests highlight "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 states.

"Given the ease with which the federal government continues to grant itself flexibility," he added, "providing a modicum of flexibility to New Jersey should not be a burden." It was a subtle dig at the many deadline extensions and delayed mandates as Obamacare's troubled rollout has proceeded.

The funds became available for other potential uses when Governor Christie decided a year ago that New Jersey would not set up its own state-based health insurance marketplace. The 2012 grant originally was intended to help set up such an exchange.

Democratic lawmakers and health-care consumer groups in New Jersey have repeatedly called upon the Christie Administration to use the funds for a public advertising campaign or other statewide push to inform the uninsured of the new health plans available under the new law. Earlier this week, U.S. Rep. Bill Pascrell, a Paterson Democrat, denounced the administration for its failure to take advantage of the grant.

On Thursday, advocates pointed to what they saw as the flaws in Kobylowski's last-minute gambit. They questioned the value of asking again for permission to use the funds in ways that have already been denied, rather than proposing new ideas to win approval.

"The letter does not even mention using these funds for outreach and education which is sorely needed in the marketplace," said Ray Castro, an analyst with New Jersey Policy Perspective, a progressive think tank in Trenton, which previously estimated that 95,000 fewer state residents will get coverage if the federal grant is not used.

"There is total silence on anything marketplace-related on the part of the [Christie] administration," said Maura Collinsgru, health care advocate for New Jersey Citizen Action. "For Christie, it's political — but for the uninsured, it's life and death."

The state's proposals to use the funds included $4.9 million for as many as 100 operators at NJFamilyCare to deal with the "unprecedented" number of callers with questions about the new health law; $780,000 to provide advice about coverage options for people with chronic diseases to be sure they remained in treatment; and slightly more than $1 million to improve the exchange of information between the federal government's web site and NJFamilyCare.

Federal officials declined repeatedly to allow the funds to be used for the first two purposes, according to the Kobylowski letter, most recently on Jan. 7.

Despite the objections, New Jersey added 75 operators to the Medicaid call center, and at a cost shared equally with the federal government. But the center is "straining to handle the large volume of calls," Kobylowski said, while it simultaneously processes an increase in applications.

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