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Obama re-election forces states to scramble on health care law

REUTERS

President Obama’s re-election has effectively ended the waiting game about whether his law that overhauls the U.S. health care system would really take effect, sending states into a scramble to -- among other things -- decide by Friday whether to establish their own programs for residents and businesses to buy the insurance.

President Obama’s re-election has effectively ended the waiting game about whether his law that overhauls the U.S. health care system would really take effect, sending states into a scramble that includes deciding by Friday whether to establish their own programs for residents and businesses to buy the insurance.

The decision is just one of several that states, businesses and individuals must make before roughly 30 million Americans start applying for insurance just 11 months from now -- through programs known as exchanges.

Health and Human Services Secretary Kathleen Sebelius sent a letter to governors Friday that extends some deadlines – including those for exchange partnerships and grants to establish exchanges. However, the letter made clear that the cutoff for governors to decide on state-run exchanges was still Friday and that insurance purchases would begin Jan. 1, 2014 “with no delays.” Open enrollment begins two months earlier.

An agency spokeswoman told FoxNews.com Tuesday this week’s deadline needed to be enforced so federal officials can see whether states are on the right track.

Obama’s re-election signals crunch time for the many businesses and states, particularly those with Republican governors, that were waiting until after the Nov. 6 election to learn whether the president would stay or the law would potentially head toward repeal, as Republican Mitt Romney had promised if elected president.  

As many as 16 states and the District of Columbia are on track to establish their own exchanges, while at least nine have decided they will not. Those nine states, if they chose not to run their own exchanges, have until February 15 to commit to a state partnership exchange and submit their plan. Otherwise, the federal government will run the exchanges.

Employers and individuals face similar decisions and deadlines.

Businesses with 50-plus workers will essentially be assessed a fee of $2,000 to $3,000 per full-time employee for not offering coverage. Their deadline is Jan. 1, 2014.

Residents who don't have insurance through an employer, with few exceptions, also have until January 2014 to decide whether to buy insurance through the exchanges or face a penalty assessed through the Internal Revenue Service.

The fines essentially begin in 2014 at $95 per adult and $47.50 per child, then increase to $695 per adult and $347.50 per child by 2016, according to the Kaiser Foundation. There are lingering questions about whether the IRS would enforce those fines. 

Though the Supreme Court in June upheld the Affordable Care Act and the president is running the country for four more years, the law still faces several hurdles in court and on Capitol Hill.

Oklahoma is arguing in court that the law says Americans can get subsidies to help them afford insurance through state-run exchange but doesn’t specifically address what happens with state-federal partnerships or those run by the Health and Human Services Department.

About half of those applying will get private insurance through the exchanges and most will receive subsidies, through tax credits, to help pay for the premiums. The can access the subsidies in January 2014.

The other half -- mostly low-income adults without children at home -- will be covered through an expansion of Medicaid. The federal government will essentially pay most of the additional Medicaid costs, but the Supreme Court has given states the leeway to opt out of the expansion.

Meanwhile, Capitol Hill Republicans negotiating a deal to reduce the federal deficit before drastic cuts to the federal budget start in January are asking Democrats for cuts to such entitlement programs as Medicaid, in exchange for agreeing to changes in the tax code that would generate revenue to pay down the deficit.

House Republicans who have voted to repeal the law appear unlikely to try again.

House Speaker John Boehner, Ohio Republican, told ABC-TV on Thursday that the president’s re-election means “ObamaCare is the law of the land.”

However, he said parts of the law are going to be expensive and difficult to implement.

The Associated Press contributed to this report.

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