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The federal government has rescinded a $7.6 million grant it awarded Gov. Chris Christie's administration to launch the health care exchange, the online portal people use to buy health coverage under the Affordable Care Act. Christie declined to create a state site, leaving the responsibility to the U.S. Department of Health and Human Services.

(Ed Murray/The Star-Ledger)

TRENTON — With a simple accounting adjustment, the Obama administration has rescinded a $7.6 million grant Gov. Chris Christie left unspent when he declined to create a health exchange to carry out the Affordable Care Act, a federal spokeswoman confirmed.

In 2012, Christie chose to let the U.S. Centers for Medicare and Medicaid Services, or CMS, create the exchange for New Jersey 's uninsured population. That kicked off nearly two years of private negotiations over how the state would use the money intended to launch the exchange — the online insurance marketplace people would shop for coverage.

Coming to no agreement by the Feb. 20 deadline, the money that had been sitting in an account for New Jersey lapsed on May 7, CMS confirmed today.

Christie's handling of the money became a rallying point for Democrats, as well as consumer advocacy groups, who said the governor's decision to cede control of the exchange was done to curry favor with national Republican leaders and donors opposed to the Affordable Care Act.

Insurance Commissioner Ken Kobylowski has said he asked HHS Secretary Kathleen Sebelius, who oversees CMS, to allow more flexibility in how the state could use the $7.6 million grant.

Kobylowski asked to use $4.86 million to staff the NJ FamilyCare hotline for state Medicaid recipients that he said has faced an "unprecedented rate" of calls about the health care law. He also said the state wanted to use the money to advise people with chronic infectious diseases about coverage options and build data connections between the state and federal marketplace.

"Unfortunately, to date, your department has determined none of those represent 'allowable' uses of this grant," Kobylowski wrote in a Feb. 19 letter.



CMS deemed those proposed options unacceptable. Consumer groups urged the Christie administration to use the money to publicize the law and encourage enrollment, which suffered from the technological and management problems at HealthCare.gov from October to December.

About 162,000 New Jerseyans signed up for private insurance using the exchange, and 140,000 for Medicaid, according to federal officials, exceeding most estimates.



A state banking and insurance department spokesman declined to comment.

Raymond Castro, senior analyst for New Jersey Policy Perspective, a liberal-leaning research nonprofit, said the state lost far more than the $7.6 million grant.

"The loss of these federal funds as a result of the state dropping the ball is a tragedy for the tens of thousands of uninsured New Jerseyans who will not receive the help they need to sign up for comprehensive health coverage in the Marketplace," Castro said. "As a result, too many New Jerseyans will remain ill and be forced to rely on temporary emergency room visits at far greater public cost."

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