Lawmakers query Sebelius on exchange grants

Two senior Republican senators who have been critical of the healthcare reform law want to know whether the Obama administration is insulating state grants for the law's health insurance exchanges from the spending cuts that HHS must carry out under sequestration.

The sweeping federal spending cuts in effect since March 1 would deplete HHS resources by $55 billion over 10 years. Iowa Sen. Chuck Grassley, ranking member of the Senate Judiciary Committee and Sen. Orrin Hatch of Utah sent a letter to Sebelius (PDF) asking her to explain how the exchange grants will be affected.

“These grants have little or no restrictions on and accountability tied to them,” Grassley and Hatch wrote. The ACA “is virtually silent on how the funds are to be used and grants HHS unrestricted access to taxpayer dollars to fund these grants.” They also fault the department for not providing appropriate guidance to states on how the money should be spent, nor for providing any oversight.

Under the reform law, these grants can be given out to states through Dec. 31, 2014. In addition, all state-run exchanges must be financially self-sustaining by Jan. 1, 2015.

The senators ask Sebelius to explain by April 22 if HHS will be eliminate or reduce exchange grants to states as part of sequestration, as well as whether the department has considered the grants while determining sequestration savings.