Little Statehouse GOP Support for State-Run Insurance Exchange

Gov. Bill Haslam now has another month to decide and declare whether Tennessee intends to manage its own so-called medical insurance “exchange” as outlined in the controversial 2010 federal health care law.

After prodding from the Republican Governors’ Association, the Obama administration agreed late Thursday to give states more time to decide if they want to manage their own government-run health coverage marketplaces, or hand the duty over to the federal government.

“It is clear that putting in place the new programs you championed will be an enormous strain on state governments and budgets, as well as the federal government,” the governors wrote. “From the financial obligations and complex technicalities to ensuring the healthcare workforce and infrastructure will be in place to meet the new demand, the timeframe and many of the provisions in the (Patient Protection and Affordable Care Act) are simply unworkable.”

States now have until Dec. 14 to make their respective Affordable Care Act health-exchange decisions.

“We are hopeful in the coming weeks we will receive answers from Washington to the many questions we’ve asked in our effort to have a full picture of the future of exchanges in Tennessee,” Haslam said in a statement issued Friday morning.

Haslam has for a while been saying he favors the state running its own exchange. Haslam indicates he believes it would be better for insurance companies doing business here to answer to Tennessee regulators, and that a state-run exchange would better serve the unique features of the state’s health care system.

“Ultimately our citizens, through insurance companies, are going to pay for the cost of running that exchange,” Haslam said on Tuesday. “Who do we think can run it cheaper, us or the federal government? I’ll bet on us every time.”

But members of Haslam’s party in the Tennessee Legislature are anything but enthusiastic about the prospects of doing the federal government’s bidding with respect to the ACA.

In the wake of the president’s re-election, Tennessee faces a difficult policy decision  surrounding the subsidized insurance marketplaces mandated under Obamacare, the governor said this week. The three options include the state setting up and running the exchanges, letting the federal government do it or pulling together some kind of a hybrid model wherein state and federal bureaucracies share responsibility for creating or managing a system.

“Let me be clear, I oppose the Affordable Care Act,” Haslam said today. “Unfortunately, the Supreme Court upheld a majority of it this summer, including the provision that states are required to either participate in a federal exchange or establish their own.”

Both parties’ leaders in the Legislature agree, as far as it goes, that the state is indeed better suited to run the Tennessee exchange than the federal government.

“Government closest to the people governs best, and that should be a guiding principle as we implement the new health care law,” Senate Minority Leader Jim Kyle, D-Memphis, said this week. House Minority Leader Craig Fitzhugh, D-Ripley, told TNReport.com he believes a state-run health exchange system “would give us a little more control, and I think Tennessee would probably like to have that.”

However, GOP lawmakers, who overwhelmingly control both chambers of the Tennessee General Assembly, are expressing doubt that the federal government can be trusted to honor the integrity of whatever systems states develop on their own.

The key details about how the exchanges are theoretically supposed to operate have yet to trickle down through the federal regulatory pipeline, which has only added to the sense of uncertainty, and Republican legislative leaders believe the unpredictability is just getting started. A prevailing sentiment among GOP state representatives and senators is that Obamacare planners in Washington clearly anticipate keeping the states on short leashes, and that federal intervention into the state-run systems will be commonplace as the administration attempts to micromanage.

Republicans suspect that when all is politically said and done, the “state-run” exchange will be so laden with federal red tape, mandates and market manipulation that Tennessee would be better served steering clear and letting the feds drive from the outset.

Glen Casada, chairman of the House Health and Human Resources Committee, said that over the past few months he’s reversed his opinion on who should run the health insurance exchanges. Casada, R-College Grove, said he used to think states ought to handle them, but no longer.

“I just cannot see a reason to implement a state exchange when the (U.S.) Health and Human Services Department will not commit to us on what we can do exactly, and for how long,” Casada told TNReport Wednesday. “If the feds came out and were very clear on what we could and could not do, with guarantees that we could keep doing what we wanted to do, you would probably see some Republican House members interested (in a state-run exchange). But under the current criteria it looks like we have to operate under, I don’t think you are going to find too many in the House Republican caucus interested.”

Skepticism and frustration pervades the upper-chamber GOP caucus, too.

“The federal government has put the state of Tennessee between a rock and a hard place on the issue of health care exchanges,” said Senate Speaker Ron Ramsey, R-Blountville. “The Obama administration has refused to answer questions and provide information necessary to make decisions by its arbitrary deadline.”

Ramsey, the state’s lieutenant governor, added that the Haslam administration is going to need a stamp of approval from the Tennessee General Assembly if it decides that setting up a state-run system is the best way to go.

“No state exchange can be implemented without the consent of the Legislature,” said Ramsey. “This issue is not going away. The Republican majority will continue to do what we must to keep all options open to minimize the impact of this insidious federal law on the citizens of Tennessee.”

Sen. Mike Bell, chairman of his chamber’s Government Operations Committee, said he has no plans right now to support any sort of state-run exchange — and thinks he’s by no means alone in the caucus.

Bell, R-Riceville, said he is “still holding out hope” that Republicans in Congress can roadblock funding for Obama’s health care law “and thereby delay or possibly even kill it at the federal level.” Bell said resistance by the states could also force the feds to abandoned their plans.

“The very weight of the responsibility for setting up that bureaucracy to run 20 or 30 state exchanges will be so heavy the federal government won’t be able to do it,” he said. “I hold out hope — now, it’s a faint hope, but I hold out hope — that there’s something that still could stop this.”

House Democrats on Friday jabbed at Haslam to quit stalling and set a course for the state.

“The Governor has had ample time to decide whether or not he wants to establish a Tennessee plan for a Health Insurance Exchange,” Fitzhugh said in a caucus release. “Now is not the time for more delays, now is the time to create an open process that brings all interested parties to the table, Democrats, Republicans, consumer advocates, insurance companies, small businesses and others, to start deciding what this Tennessee Health Insurance Exchange will look like.”