Georgia Gov. Nathan Deal said Friday the state will not build its own online health insurance exchange where hundreds of thousands of consumers will shop for affordable coverage – ceding control to the federal government instead.
The new health-care law requires states to have such insurance exchanges.
Deal said in a statement that “Obamacare” is a one-size-fits-all approach with too many regulations that prevent Georgia from tailoring an exchange to meet the unique needs of its residents and small businesses. It also places a costly burden on states, he said.
“We have no interest in spending our tax dollars on an exchange that is state-based in name only,” he said. “I would support a free market-based approach that could serve as a useful tool for Georgia’s small businesses, but the federal guidelines forbid that.”
Georgia Senate Democrats criticized Deal’s decision, arguing the state is sacrificing any influence it could have had on how the exchange is set up.
“It is unfortunate that the governor has chosen to put politics over the needs of Georgians,” said state Sen. Vincent Fort, D-Atlanta.
For months, Deal and other Republican governors put off the decision on whether to build state-based exchanges, in hopes that Mitt Romney would repeal the Affordable Care Act if elected. Experts say even if Georgia had wanted to build its own exchange there likely wouldn’t have been enough time left to get one up and running by the Jan. 1, 2014 deadline. People will begin enrolling in October of next year.
The exchanges are a pillar of the landmark law that aims to provide millions of uninsured Americans with health coverage. They are online marketplaces where consumers and small businesses will be able to compare the quality and prices of health plans. An estimated 900,000 Georgians are expected to shop on the exchange website — where people will also be able to find out if they are eligible for Medicaid, the government health program for the poor, or federal subsidies designed to make coverage affordable.
Industry observers say a state-created exchange would have been able to respond more quickly to market forces unique to Georgia.
The state also could have had some flexibility in how an exchange operated, such as who would govern it and how it contracts with health plans, said Tim Sweeney, a health-care policy expert at the nonprofit Georgia Budget and Policy Institute.
While Georgia choosing not to create its own exchange may be a missed opportunity, consumers will still have access to the same options under a federal marketplace, Sweeney added.
“It’s important for people to know that there will still be an exchange here,” he said. “Other provisions of the law will be implemented … this is not opting out of the law.”
Even though Georgia doesn’t plan to create its own exchange, state officials have much to do in the coming months.
“There are still plenty of decisions to be made on how to coordinate with a federal exchange,” said William Custer, a health care expert at Georgia State University.
States already have regulations that govern their health insurance markets, which will have to be reconciled with new rules under the exchanges, Custer said. Federal officials are expected to put out more details in the next six weeks or so on exactly how the exchanges will operate.
“It’s a lot of ‘stay tuned’,” Custer said.
As of Thursday, 19 other states, including South Carolina and Virginia, had also opted not to create exchanges, according to the nonprofit Kaiser Health News. Another 19 mostly Democratic-run states and the District of Columbia are moving forward with exchanges. Meanwhile, at least five others plan to partner with the federal government, with the rest still undecided, Kaiser reported.
States were originally supposed to declare Friday whether they planned to build their own exchanges, but the Obama administration pushed back the deadline until Dec. 14, in response to a letter from two Republican governors asking for an extension and a personal meeting with President Barack Obama.
“The lack of a complete and open rulemaking process and the deficit of information being shared with states have created a virtual roadblock for governors, who must decipher what type of exchange is appropriate for their state,” said Virginia Gov. Bob McDonnell, who co-authored the letter with Gov. Bobby Jindal of Louisiana.
States that do not choose a state-created exchange will have until mid-February to decide whether to partner with the federal government on one. A spokeswoman for Deal said the governor has no plans at this point to pursue a partnership. States will also be able to opt to take over exchanges in the future.
Georgia Insurance Commissioner Ralph Hudgens said in a statement Friday that he agrees with the governor’s decision and continues to hope Washington will give states the flexibility to craft free-market solutions to health insurance challenges.
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