Georgia will not operate its own health insurance exchange, Gov. Nathan Deal said Friday.
The 2010 Affordable Care Act (ACA) requires such an exchange in each state. Deal’s decision, which had been expected, means the federal government will create and run the exchange in Georgia.
The governor, in a letter to U.S. Health and Human Services Secretary Kathleen Sebelius explaining his decision, said, “I remain concerned with the one-size-fits-all approach and high financial burden imposed on states by this federal mandate.”
“We believe that a well-designed, private free-market approach to small business exchanges could be beneficial to small businesses but the regulations promulgated by your administration take those options away,’’ said the letter, dated Friday.
A health insurance exchange is intended to function as an online marketplace where individuals and small businesses can shop for coverage. The exchanges are scheduled to open in January 2014, and most customers will be eligible for government subsidies to help them afford premiums.
Opponents of the health reform law, including top Georgia Republicans such as as Deal, were hoping the legislation would be repealed or rolled back, so that decisions on exchanges would not be necessary. But President Barack Obama’s re-election last week ensured that the ACA’s provisions will go forward.
Friday was the original deadline for states to submit letters of intent on exchanges. On Thursday, Sebelius extended the deadline until Dec. 14, but many states were expected to go ahead and announce their plans in time for the original deadline, which is what Georgia did.
Each state was given the option of running its own exchange, sharing the responsibility with the federal government or letting the feds run it entirely.
Ahead of that deadline, The Associated Press reported that 16 states — including Republican-led Mississippi — had indicated they wanted to operate their own exchanges.
Seven other states, including North Carolina and Arkansas, have signaled they wanted to partner with the federal government, the AP reported. The number of partnership states could grow significantly, because the White House has given states until next February to decide on that option.
Fifteen states – now including Georgia – say they will let the federal government operate the exchange in their state.
Florida Gov. Rick Scott, a Republican and former health care executive who has vehemently opposed the ACA, is now saying he wants to find a way to work with the federal government.
Deal, though, said in a statement that the federal government needs to loosen regulations that restrict states’ health care options.
“I have joined numerous other governors seeking guidance from the federal government on establishing exchanges,’’ Deal added. “We’ve yet to receive serious answers to our questions. I will not commit Georgia taxpayers to a project with so many unknowns.”
State Insurance Commissioner Ralph Hudgens said he agreed with Deal’s decision, adding that he would have preferred “a more competitive private market approach’’ to an insurance exchange.
Deal set up a advisory committee last year that recommended that Georgia move forward on creating an exchange for small businesses.
A member of that panel, Cindy Zeldin of the consumer group Georgians for a Healthy Future, told GHN on Friday that the state, if it opted to run its own exchange, “would have a better understanding of Georgia’s insurance market than the feds do.’’
The federal government, in the wake of Deal’s decision, should now engage consumers and stakeholders “and make sure it works well,’’ Zeldin said.
An exchange “will help improve the health insurance market in Georgia,’’ she said. “It’s important that state policymakers work to support this rather than undermine it.’’
A leader of an industry trade group declared that “the reasoning of Governor Deal is thoughtful and sound.”
“It’s a time of great uncertainty’’ in health insurance, said Graham Thompson, executive director of the Georgia Association of Health Plans.
Thompson noted that a model for how the insurance exchange will operate does not exist. And he added, “The governor understood that this [exchange] would be tough sledding to get through the Legislature.’’
A bigger decision brought on by the Affordable Care Act awaits Deal and legislators: Whether to expand the state’s Medicaid program, as envisioned by the 2010 law.
The federal government cannot penalize a state for refusing to take this step, so the debate in Georgia will focus on whether Medicaid expansion is in the state’s best interest.