Obama budget sets aside $864M to set up healthcare law

President Obama's budget includes $864 million to get a key element of his healthcare reform law off the ground.

The law requires health insurance exchanges to be in place in all 50 states by Jan. 1, 2014. States that want to run their own exchanges must pass muster with the federal government by the end of 2013; the federal government will operate a default exchange in states that fail to launch their own.

The funding increase is included in a $1 billion hike for program management at the Medicare agency, which hosts the exchange program.

"The majority of that funding is going to the implementation of the exchanges," said Marilyn Tavenner, the acting administrator for the Centers for Medicare and Medicaid Services. "We plan on working with Congress for additional funding. … We have a plan to implement the exchanges so they'll be operational by 2014."

The healthcare law did not set aside any money specifically for the creation of a federal exchange. The new budget fixes that by allocating $574 million for the creation of the so-called "Federally-facilitated Exchange" and to "begin the process of certifying state-based Exchanges," according to budget documents.

The federal exchange portion would pay for operations that include "receiving and evaluating submissions from issuers for qualified health plans in the [federal exchange], contracting with entities to perform eligibility and enrollment functions, quality and setting up financial management and oversight infrastructure."

The budget also sets aside $290 million for "consumer and beneficiary education and outreach" within the exchanges.

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