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State HIX Options 'Ironic from Both Sides'

 |  By John Commins  
   November 14, 2012

In one of the many ironies of the healthcare reform debate, several governors are citing the defense of state sovereignty as a reason why they won't build health insurance exchanges. It is a strategy that effectively cedes regulatory control of the exchanges to the federal government.

"It is ironic from both sides," says Alan Weil, executive director of the nonprofit, nonpartisan National Academy for State Health Policy. "The House Democrats wanted a national exchange and they are going to get their national exchange in the states that are generally most resistant to federal control. It is not how anyone would have planned." 

The Republican governors of Texas, Kansas, Virginia, Georgia, South Carolina, and Florida have announced over the last several months that they have no intention of submitting plans for a state-run health insurance exchange under the Patient Protection and Affordable Care Act. Under the law, if states don't build the exchanges, the federal government will step in and do it.

"Neither a 'state' exchange nor the expansion of Medicaid under the Orwellian-named P.P.A.C.A. would result in better 'patient protection' or in more 'affordable care,'" Texas Gov. Rick Perry said in July in a letter to Health and Human Services Secretary Kathleen Sebelius. "What they would do is make Texas a mere appendage of the federal government when it comes to health care."

Last week, Kansas Gov. Sam Brownback said in a media release that "my administration will not partner with the federal government to create a state-federal partnership insurance exchange because we will not benefit from it and implementing it could costs Kansas taxpayers millions of dollars."

Instead, Brownback said elected officials who support the health insurance exchanges would have to bring the issue before the state legislature in 2013. Brownback's statement put the kibosh on a HIX "blueprint" that Kansas insurance regulators were preparing to submit to HHS this week.

"We were ready to file a declaration letter and file a blueprint by this Friday," said Kansas Insurance Commissioner Sandy Praeger, a Republican who is serving her third consecutive term in the elected post.

"We had all of the 'I's dotted and 'T's crossed. But obviously, without the support of the governor and his perceived lack of support from the new legislature that will be sworn in,  there is no point in trying to move forward on something I can't deliver on. So, we are not moving forward."

Praeger says she and insurance commissioners in other states have expressed concerns about "abdicating" so easily the regulatory authority that states have fought for and crafted for so many years.

"It is a concern because traditionally over the years we have advocated and protected the ability of states to regulate all lines of insurance," she says. "Now what some states are doing, ours included, is abdicating that right and saying 'We don't want to regulate. We want the feds to do this.' Is that a slippery slope we are going down? Are we going to lose the ability to regulate other areas?"

"These states that are not moving forward (on exchanges) are major states' rights states, and yet we are abdicating to the federal government the right of the state to regulate itself," Praeger says.

"I still am hopeful because to me it just makes sense that this is what we should be doing. It's too bad that these decisions had to be made this closer to the election because there was a lot of fallout. I am just hoping calmer minds will prevail when the dust settles and people will have a sense of what potentially we are giving up."

What states are potentially giving up, Praeger says, is the authority to determine what insurance companies are allowed to sell on their exchanges and what those plans and their benefits packages will look like.

"I am concerned that we are not going to be there to answer questions from consumers," Praeger says. "And even from plan management standpoint HHS is not going to be able to look at every plan that is prepared for every state because these are still state-specific."

Praeger says she shares the frustrations that many healthcare providers in the state have expressed over the years-long political slugfest that has embroiled PPACA.

There are clear signals that resistance to "Obamacare" may be weakening. Florida Gov. Rick Scott, a strident and vocal opponent of PPACA, said in an interview this week that he was now open to negotiating with the federal government about implementing some of the reforms in his state. "The election is over and President Obama won," Scott told the Associated Press. "I'm responsible for the families of Florida ... If I can get to yes, I want to get to yes."

Says Praeger, "The medical community wants a system where people can get access to the services they need when they need them and not have to wait until they are so sick they end up in the emergency room. That's not a healthcare system. That is a sick care system and that is what we have and it's just wrong."

"I have been in public policy now and it's been the No. 1 thing I felt we should be dealing with in this country. It's not perfect, but at least let's quit fighting it and move forward and work to make it better and implement. So yes I am a little frustrated."

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John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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