Republicans Angry Some Health Exchange Money Used for 'Propaganda'

The deal was: start a state health insurance exchange (HIX) by a certain date or we’ll do it for you.

That was part of the healthcare reform act, aimed at helping people find insurance from a grab bag of different policies, as required by the federal government, and the feds would give the states the money to do it. Exchanges are new organizations that will be set up to create a more organized and competitive market for buying health insurance.

But Congressional Republicans, furious that federal exchange funding has gone to, as they see it, “insert propaganda into the popular culture,” have demanded details on the grants and the extent of their oversight by HHS, according to a story by Rich Daly.

HHS Secretary Kathleen Sebelius was contacted Friday by Sen. Chuck Grassley (R-Iowa), ranking member of the Judiciary Committee, and Rep. Fred Upton (R-Mich.), chairman of the Energy and Commerce Committee, “for details about how the states have used about $2.2 billion in various types of exchange funding that the department has issued so far,” Daly reported.

The funds were intended to help states launch insurance marketplaces by 2014, although most states are expected to have their exchanges operated by the federal government—at least initially.

“The Republicans' ire was drawn by published reports that the California exchange, which the HHS exchange site lists as having received almost $236 million in federal support, spent nearly $1 million on a contract at least partly aimed at inserting positive references to the federal healthcare law into network television entertainment programs,” Daly revealed.

“Americans' hard-earned money should not be taken by government to subsidize Hollywood and insert propaganda into the popular culture,” the members of Congress wrote. “It should be going toward ensuring that the cost of healthcare is being lowered for all Americans.”

The department was reviewing the letter Friday and did not have any comments, an official said.

As of September 14, 15 states have established HIXs; 15 are studying their options; two are planning a partnership exchange, along with parts of Wisconsin and Missouri; nine have done nothing, and seven have said no way, we’re not going to do it.

Also, HHS confirmed that four states have officially returned some category of exchange funding: Oklahoma, Kansas, Louisiana and Maine. Also, Wisconsin is in the process of returning its early innovator grant, according to Daly.