States suing over health care law collect funding

Federal officials announced Tuesday they are awarding more money to help states carry out President Barack Obama's health care overhaul. So what's the surprise?

Seven states that are suing to overturn the landmark law are also on the list for funding.

Health and Human Services Secretary Kathleen Sebelius said 13 states will split grants totaling nearly $220 million to help set up health insurance exchanges. Millions of uninsured Americans will be able to buy private coverage through these online supermarkets starting in 2014, with taxpayer-provided assistance to cover the cost of premiums.

"States are moving at their own pace to get their exchanges up and running," said Sebelius.

The exchanges represent half of Obama's strategy for expanding coverage to more than 30 million uninsured people. While the middle-class uninsured will pick a plan through their state exchange, low-income people will be covered through an expanded Medicaid program.

Although opponents challenge the constitutionality of "Obamacare," some states led by conservatives are hedging their bets.

The seven that are suing and also getting money: Alabama, Arizona, Idaho, Iowa, Maine, Michigan and Nebraska. Three other plaintiff states — Indiana, Mississippi and Nevada — previously got funding.

Accepting the money does not commit a state to follow through and actually establish a health insurance exchange.

But it is a sign that federal officials recognize a state is making significant progress. The money can be used for a variety of purposes, including tackling such challenges as the kind of technology a state will use to sign up its citizens.

Under the law, if a state fails to set up an exchange, the federal government will step in and do it for them.

"We continue to encourage all states to establish their own exchanges," said Chiquita Brooks-LaSure, HHS director of coverage policy. "We think states are in the position of understanding best what they need for their own residents."

States are all over the place in their preparations for the health overhaul.

Some are on the sidelines, waiting for the Supreme Court to rule. Others, like California, are forging ahead to set up their exchanges. Vermont even wants to run a statewide single-payer system loosely modeled on Canada's. Many have made varying degrees of progress. In most states, pivotal health care decisions will be made in next year's legislative sessions.

Also receiving grants Tuesday were Delaware, Hawaii, New Mexico, Rhode Island, Tennessee and Vermont.

Rhode Island earned the distinction of becoming the first "Level Two" grant recipient, meaning the state has made a formal commitment to set up an exchange and is receiving multi-year funding.

Counting those that previously received funding, a total of 29 states have now received advanced planning grants.

Also Tuesday, federal officials released guidance for the state on technical issues involving coordination between different levels of government in the operation of the exchanges.