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House Votes to Defund Exchanges, Senate Prospects Dim, Veto Threatened

On May 3, 2011 the U.S. House of Representatives voted 238-183 to eliminate $1.9 billion in grant funding for state-based health insurance exchanges. The vote...
May 10, 2011

On May 3, 2011 the U.S. House of Representatives voted 238-183 to eliminate $1.9 billion in grant funding for state-based health insurance exchanges. The vote sends H.R. 1213 to the Senate, where it will run up against a Democratic majority. The bill also faces a veto threat from President Barack Obama.

"PIA applauds the fact that the House is moving in the right direction by voting to defund health insurance exchanges," said PIA National Executive Vice President & CEO Leonard C. Brevik.

"At the same time, lawmakers need to guard against unintended consequences," Brevik said. "While H.R. 1213 would cut funding to assist states in establishing their exchanges under the healthcare law, it leaves intact a provision that says that if a state does not set up an exchange, the federal government is required to do so. This could inadvertently create a backdoor incentive for more, rather than less federal involvement. Partial reform is no reform if it removes the states from the process, only to give greater power to the federal government."

"On the matter of defunding, PIA also urges lawmakers to act to defund a study of the supposed 'benefits' of federal insurance regulation by the new Federal Insurance Office (FIO), or at least authorize a parallel study by the Government Accountability Office (GAO)," Brevik said. "A government agency like the FIO cannot be objective in assessing whether or not its own authority should be expanded."

Read PIA EVP Len Brevik's comments: PIA Says House "Moving in Right Direction" (Insurance & Financial Advisor 5/6/11)

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