GOP's Repeal Of Health Exchange Funding Would Hurt Small Businesses, States, And The Uninsured

May 03, 2011 5:34 pm ET — Meredith Kormes

As we pointed out earlier, Republicans have taken a convoluted path to come to their current position on health insurance exchanges. Today, the House is expected to pass a bill to repeal the funding in the Affordable Care Act that provides grants to the states to create health insurance exchanges. Previous attempts to repeal all or parts of the health care law have exposed the true negative impact these actions have on real people. And repealing this provision is no different. Eliminating the funding for state exchanges will hurt the states, small businesses, and the uninsured.  

States that want to set up their own exchanges (rather than having the federal government set it up for them) will now face the burden of not having the implementation funding, making exchanges more expensive for states that are already facing budget crises. A recent CBO report noted that "states that establish exchanges without federal funding also may face greater challenges in becoming fully operational." According to the Department of Health and Human Services, 48 states and the District of Columbia have already received federal funding to assist them in planning their state exchanges.  

And many small businesses have been looking toward the exchanges as an affordable way to provide health care to their employees. According to a Small Business Majority poll, 33 percent of small business owners not offering insurance said they would be more likely to because of the insurance exchanges. And 31 percent of respondents who already offer insurance said the exchanges would make them more likely to continue offering it. Even the National Federation of Independent Business (NFIB), an organization "committed to overturning the federal health care plan," came out in support of a bill in Colorado that would create a state health care exchange because it would benefit small businesses.

Additionally, while the recent CBO report shows that repealing this provision could save about $14 billion over the next decade, it also states that if the grant money is repealed, fewer people will be enrolled in the exchanges and there will be "reductions in subsidies for health insurance purchased through the exchanges," leading to more uninsured. In fact, the CBO estimates that because of H.R. 1213, "the number of people without health insurance is expected to increase by about half a million in 2015."

Furthermore, the CBO said that "repealing mandatory funding for states to establish insurance exchanges would increase the workload for the Department of Health and Human Services for establishing such exchanges. As a result, there could be an increase in discretionary spending under H.R. 1213."

UPDATE: The House passed the bill 238 to 183.