By Sam Baker - 05/02/11 08:55 PM EDT
The healthcare law envisions exchanges as a one-stop shop for individuals and small businesses to purchase insurance.
A spokeswoman for Rep. Fred Upton (R-Mich.), the bill's sponsor, said there are too many strings attached to the HHS planning grants. States don't have any real flexibility over their exchanges, she said, so the idea that Upton's bill would limit their choices is "smoke and mirrors."
But consumer advocate and Washington and Lee University law Professor Tim Jost said mandates for state exchanges are laid out in the reform law itself — they're not conditions attached directly to grant money.
Although states would only be able to receive the grants by working toward an exchange that meets federal criteria, receiving a grant doesn’t bring on new obligations, he said.
Every state except Alaska applied for and received an initial round of $1 million exchange planning grants, and HHS announced another opportunity in January. Officials have said they want the new marketplaces to be state-based, but many Republicans have said the requirements spelled out in the healthcare law are too onerous.
The bill passed the Energy and Commerce Committee, which Upton leads, on a party-line vote last month.