For more than a year, Secretary Kathleen Sebelius and others at the U.S. Department of Health and Human Services have been courting states to take part in setting up and running a health insurance exchange. But Missouri, home of an enthusiastic governor and opposing legislature, keeps sending mixed messages. Now, with Friday’s deadline looming for states to commit to joining the feds in setting up an exchange, it appears as though HHS will be flying solo in the Show-Me state.
HHS to states: Won’t you be my Valentine?
Health exchanges are online marketplaces which, under the federal health law, are supposed to help people and small businesses better compare and shop for health insurance. They’re slated to go live in all states on January 1, 2014, with enrollment starting in October of this year.
States can run the exchange, the federal government can do it, or the federal government and the state can run one together. The deadline for states to run their own exchange has passed. Missouri and a host of other states now have until midnight, February 15, to indicate whether they wish to set up an exchange in partnership with the federal government. Otherwise, the federal government will completely oversee it.
HHS wants each state’s hand in this. Insurance regulation has historically been a state function.
Secretary Sebelius said as much during a stop to Metropolitan Community College in Kansas City last year:
“As a former insurance commissioner and as a former governor, I think states should have the primary role. I was very supportive of the framework of bill that says insurance is regulated at the state level, it makes sense that the state has the marketplace,” Sebelius said. “If indeed they choose not to do it, we will make sure that Missourians and Kansans have the benefits of the Affordable Care Act.”
Not getting as warm a response as they’d hoped from states, HHS even extended key deadlines.
Missouri shows interest
In the spring of 2011, Missouri was considered on track – ahead, even - in developing a state-run health exchange. Senator Chris Molendorp (R-Belton) had spent the session crafting legislation to establish a so-called “Show-Me Health Insurance Exchange.” At the time, Molendorp said he was against the federal health law but preferred the state run an exchange, as opposed to the feds coming in and doing it instead.
The cold shoulder
The honeymoon period for a state-run exchange didn’t last long.
With the health law wildly unpopular in Missouri and with uncertainties looming over the law’s fate in the U.S. Supreme Court, Molendorp’s legislation stalled in the state senate. The exchange planning, meanwhile, came to a halt, following some lawmakers’ concerns over transparency.
While the idea of a state exchange didn’t gain any more traction in the legislature, another proposal did: Proposition E. The measure, unique to Missouri, prohibits the Governor or any part of his administration, including the insurance department, from setting up or helping run an exchange without legislative approval.
Voters approved it last November.
Missouri Governor Jay Nixon, a democrat, said he had no plans to issue an executive order or move forward with an exchange without approval from lawmakers, anyway.
A change of heart?
Following his reelection in November, Nixon became more vocal about his interest in an exchange. Speaking at a news conference the day before the deadline for states to tell HHS whether they would run a state exchange, Nixon made his preference clear.
“Regulating the insurance market is a power best left in the hands of the states, where we can perform those duties more efficiently and effectively and provide better service for our consumers,” he said.
But Proposition E, Nixon continued, prevented Missouri from taking a lead. The legislature wouldn’t convene until well after the November deadline.
“Based on current state law and the federal deadline, the state-based option isn’t on the table for Missouri at this time,” Nixon said.
A love lost
Fast forward to Valentine’s Day, 2013.
Missouri and a host of other states have a little over 24 hours to indicate whether they wish to set up an exchange in partnership with the federal government. The alternative? A federally run exchange.
According to HHS, at least 20 states have indicated they'll set up their own exchange or run a partnership one. That still leaves a majority of states either opting for a federal exchange or having yet to indicate their plans for a partnership exchange.
Missouri’s 2013 legislative session commenced last month, but so far, there hasn’t been much traction among lawmakers for any sort of involvement in an exchange.
“I don’t believe that we will be submitting anything [to HHS to run a partnership exchange],” said Senator Scott Rupp (R-St. Charles), who chairs the Senate’s business, insurance and industry committee. “I think we’re just aligned to having the federal government run its exchange in the state.”
Senator Schaaf (R-St. Joseph), who sponsored Proposition E, agrees.
“There is no appetite in the legislature to do that, I don’t think,” he said.
Speaking near Kansas City last week, Nixon said not doing anything with an exchange is a missed opportunity, and he hopes that will change. But he hasn’t been losing sleep over it. Instead, he says his energy has been directed elsewhere, on another key decision the state faces in light of the federal health law: expanding Medicaid.
“I don’t mean to say that the health exchange is not important, I think having that opportunity especially for small businesses to purchase competitive-priced-tailored insurance on an exchange is a good thing,” Nixon said. “But in the zone of where we’re at right now, getting back Missouri taxpayer dollars that could have significant and immediate effects starting January 1 of 2014 under a Medicaid expansion is under a hierarchy of focus for me.”
Nixon's Medicaid push faces an uphill battle in the legislature. Majority leaders are against it, and cite concerns over an expansion's long-term costs and the growth of an already big public program.
Rekindling old flames?
While states like Missouri may not initially participate in setting up an exchange, HHS has indicated there will still be plenty of opportunities to get involved once everything is up and running.
Senator Rupp, who doesn't support state involvement at this time, has been flirting with that notion.
“I think it [the likelihood of being involved] is pretty good because there are some serious, legitimate concerns,” Rupp said. “If it’s done incorrectly, you could almost eliminate the entire independent insurance broker. Obviously you wouldn’t want that to happen, you could almost wipe their whole industry out if we’re not careful.”
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