By Rebecca Adams, CQ HealthBeat Associate Editor
November 15, 2012 -- Leaders in Nebraska, North Carolina, South Carolina, and Indiana late last week announced their decisions on what kind of health benefits exchanges they want in their states. Federal officials had set Friday as the deadline for states to tell them if they plan to run their own marketplace.
Nebraska Republican Gov. Dave Heineman said in a news conference that while he had first thought it would be better for Nebraska officials to control the exchange, he felt that the 2010 health care overhaul (PL 111-148, PL 111-152) contained so many mandates that it left the state with little discretion about the details of the coverage in the exchange and the operational costs could be too costly. Heineman also confirmed that he would not expand Medicaid.
"The bottom line is a state insurance exchange is really controlled by the federal government" and yet it would be very expensive for the state to operate its own marketplace, Heineman said at the news conference.
The Nebraska Department of Insurance and the Department of Health and Human Services estimated it would cost the state $646 million from fiscal 2013 to 2020 to run its own exchange but only $176 million if the federal government ran it, a savings of $470 million to the state, the governor said.
"Any time you've got the federal government in charge, we should be concerned," he said.
Heineman also said that the state is still waiting for key federal rules to be issued and is frustrated that he has not gotten a response to a Sept. 6 letter he sent to Health and Human Services Secretary Kathleen Sebelius.
"I don't call that much of a partnership," he said.
In North Carolina, Democratic Gov. Bev Perdue announced that her state would pursue a partnership with the federal government.
"North Carolina is moving forward with implementing a process that provides much-needed health insurance for every citizen," Perdue said. "It is critical for our state to participate in decisions that affect our state's citizens. We will not cede total control to the federal government. It remains my goal to pursue a state-based plan."
The North Carolina Department of Insurance and the North Carolina Department of Health and Human Services will work together to implement the exchange, with the insurance department taking the lead. Perdue said that North Carolina missed the chance to set up a state-only exchange by 2014 because the legislature did not authorize it during the last session. Perdue is leaving office in January and will be replaced by Republican Pat McCrory.
The state also was working on a grant application to help provide funding for a partnership or a state-only exchange in the future.
South Carolina officials said they would rely on the federal government to operate its exchange. Gov. Nikki Haley said in a letter to Sebelius that President Obama's re-election has not "changed my original decision: our state should not and will not set up a state-based healthcare exchange."
In Indiana, Republican Gov.-elect Mike Pence did not rule out operating a partnership with the federal government, but said in a letter to Indiana Gov. Mitch Daniels that he does "not believe the State of Indiana should establish a state-based health insurance exchange because doing so will cost taxpayers millions of dollars and it is not clear that Hoosiers would benefit from incurring the cost of implementing this new federal health care bureaucracy. Without knowing more details on the cost and nature of state-based exchanges, it is possible that our state could be placed in the untenable position of serving as the administrator of a new federal healthcare bureaucracy over which we have little control."
Pence said that establishing a state-based exchange would cost the state about $50 million per year.
The consulting firm Avalere Health is making predictions on states' decisions and updating those projections daily. The group's most recent projection is that 17 states will definitely run their own exchanges, one state (Utah) probably will run its own, six states have announced that they will partner with the federal government, 16 states have said they will rely on the federal government and another five will probably rely on the federal exchange.
