Haslam decides to pass on state-run health insurance exchange

Monday, December 10, 2012 at 3:45pm

Update 3:55 p.m.

Tennessee will pass on running health insurance exchanges and instead hand off those duties to the federal government, Gov. Bill Haslam said Monday.

The governor, who has faced months of mounting pressure from Republican lawmakers and phone calls from the public, said the federal government hasn’t given him enough confidence to buy into the idea of running the exchange. Haslam informed U.S. Department of Health and Human Services Secretary Kathleen Sebelius of his decision in a letter dated Dec. 10.

“There will be people who say, ‘Oh you are just making a political decision,’ he told Nashville Downtown Rotary Club members at the Wildhorse Saloon Monday. “If it was a political decision, we would have made this months ago.”

The federal government is now left to run the exchanges, which are online marketplaces for people and small businesses to comparison shop for health insurance plans. The exchanges are required by the Patient Protection and Affordable Care Act with open enrollment beginning next  October and health plans kicking in by January 2014.

Haslam, who has said he is opposed to the so-called “Obamacare” program, had for months put off his decision on whether to run the exchanges, first by saying he wanted to wait until after the presidential election, then by taking advantage of the federal government giving states an extra month to decide.

The governor has yet to decide whether to expand the state’s TennCare program, another decision that the governor is faced with under so-called “Obamacare.”

Haslam told reporters a decision on expanding the Medicaid rolls may not come until the General Assembly has adjourned for the year. Republican leaders are largely resistant to expanding the program.

Haslam had originally leaned toward the state running the exchange and said Tennessee could run the system “better and cheaper” than the federal government. But as the governor approached deadlines to decide whether to take on the exchange, he pointed to a lack of specifics from federal officials on details of the program “that is scary, quite franky.”

“There would be significant risk involved with taking on an exchange while your department is still developing the rules of the game or if the federal government is ultimately going to control the most important levers,” Haslam said in his letter to Sebelius.

Meanwhile, Republicans have been vocally opposed to signing up to a state-run exchange, including GOP lawmakers elected in November on platforms opposing “Obamacare.”

“The decisions regarding health care are best left to each Tennessean and their doctor — not a massive bureaucracy that is sure to send this country further into debt,” said House Speaker Beth Harwell, backing Haslam’s decision.

The governor’s office has fielded more than 4,000 emails and 2,000 phone calls from the public about the exchanges, according to the governor’s spokesman. Most of those phone calls came from people opposed to the exchanges.

A Tea Party rally outside the state Capitol building last week featured protesters demanding the governor “just say no” to a state-run exchange.

Health insurance companies such as BlueCross BlueShield of Tennessee were in favor of a state-run exchange but said they would work with the federal government instead.

“We certainly understand and respect the governor’s decision on the exchange,” said Bill Gracey, BlueCross CEO, told The City Paper. “With this clear direction, BlueCross will continue taking the steps necessary to have new individual products ready for Tennesseans when open enrollment for the exchange begins.”

Democrats, who are in the minority on Capitol Hill, accused the governor of folding to the will of the GOP-led legislature.

“I’m disappointed to see the governor pandering to the far right of his party rather than doing what is best for the people of Tennessee,” said Leader Craig Fitzhugh, of Ripley. “I would hate to know that I had a 70 percent approval rating statewide, and couldn’t get my own party to support my initiatives.”

Rep. Glen Casada, House Republican Caucus chairman from Franklin, argued the decision was anything but political.

“Democrats, who are on the outside looking in and have an insatiable appetite for government largesse, will try and paint this as a political decision by the Governor. That could not be further from the truth,” he said.

Letter to Secretary Sebelius.pdf98.4 KB

16 Comments on this post:

By: courier37027 on 12/10/12 at 5:40

Wow, this means my insurance premiums will be going down. --sarcasm--

By: pswindle on 12/10/12 at 9:19

Our Governor is in over his head. This does mean that your insuance will go down. The insurance companies will be in competition with each other. The bidding can go across state lines. When Obamacare is all in place, most will have insurance, and that is a good thing.

By: dva56 on 12/10/12 at 9:30

For some odd reason the Tea Party and our governor who has just bowed to their will seem to think that paying for emergency care at 100 times the rate for the uninsured rather than preventative care will keep their insurance premiums down. No wonder they lost the White House.

By: WickedTribe on 12/10/12 at 11:56

Excellent news! This state government running ANYTHING would be an epic disaster.

By: Blip on 12/11/12 at 7:34

So the Tea Party decides state control is not as good as Federal Control. Wait - doesn't the Tea Party believe in states having control? Uh....

By: GUARDIAN on 12/11/12 at 8:10

YES ......... :-) .... GUARDIAN-GOD, COUNTRY, FAMILY and FRIENDS. The American Way.

By: joe41 on 12/11/12 at 8:15

This was really a dumb decision by our governor. He is not representing what we need and is just making this a political decision rather than a business decision. Shows weakness on his part!Joe

By: TimSkow on 12/11/12 at 9:05

Tim Skow;
Prior comments miss the REAL point. The FEDs continue to "make up the rules as they go along"..including another 373 pages of NEW regulations regarding Obamacare just 2 weeks ago. [remember Pelosi saying... "we gotta pass the bill to find out what's in the bill] -- How could Gov HASLAM justify signing on to a program knowing the "rules" could change AT ANY time? The FEDs forced his hand.

By: njmccune on 12/11/12 at 9:16

The tea party wants less federal government in our lives but wants the state to abdicate their responsibility to run a health care exchange... just another wacky idea by the teabaggers! Our no guts govenor won't even fight for what is good for the people who elected him.

On another note... the Tennessee Legislature has ben named the worst in all 50 states, but then we knew that, didn't we??

By: MikeDalak on 12/11/12 at 9:25

I congratulate Governor Haslam in his decision. I would further encourage the Governor to not expand Medicare. Obamacare will prove to be a HUGE costly mistake for our country. It will also prove to only increase cost as it does nothing to actually address the rising cost of heath care.

By: amoobrasil on 12/11/12 at 9:49

So far most people posting here see through the Governor's fear of fanatical, misinformed "conservatives", the latter resentful of the scapegoats on whom they blame our lower wages (for lack--in reality--, among other things, of strong support of labor unions) and unwilling to recognize the fact that we are losing good jobs, more security as we approach retirement, and access to health care because Tennessee politicians (the GOP being by far the worst offender), under the label of "conservative", reward their big corporate donors by letting them make all the rules at the expense of hard-working businessmen and their employees.

There is nothing conservative about giving taxpayer-funded "incentives" and subsidies only to wealthy corporations that finance campaigns. Because of this preferential treatment, those corporations get out of paying property taxes, sales taxes, and they even enjoy a partial building of their facilities at taxpayer expense. Honest businessmen who cannot afford to pay for (through legal bribes) selective pampering, must find a way to compete on an uneven field.

Haslam makes a mockery out of the term "conservative" by allowing the federal government to set up the exchanges; after all, as the Governor once said, state and local government, in theory, make better decisions for their people because they are closer to us.

Enough still-angry white guys will go on electing Republicans, fooled into thinking that the GOP "understands" them. All of us pay the price for their adolescent foolishness.

By: Kosh III on 12/11/12 at 9:52

The real reason is that the TennCare Bureau hasn't a clue about what to do; which is par for the course.

Exchanges have been around for a while, they could have patterned a TN exchange after Mass. where RomneyCare has been in effect for years.

Changes will happen ALL the time, before during and after the exchanges are set up.

By: News4free on 12/11/12 at 10:28

The federal govt can't have it both ways. They think they can use state gov and state resources for a federal program - which they haven't fully thought out. Yet when states want the federal govt to enforce federal law and then step in to do it for them the federal govt SUES the state govt for doing so (aka Arizona). It would be far better for the fed govt to set this up AND THEN say "hey states what would you like to customize for your state?" The federal govt is going to control the exchanges so they might as well design it once to meet their desires. Why have 50 different duplications of efforts in the initial implementation. A HUGE waste of taxpayer money and effort. The changes the states will want - will be down the road.
And, please, stop confusing health care with insurance and/or the ability to pay for either.

By: James Arthur on 12/11/12 at 12:38

Gov. Haslam made the right decision. I'll try to explain some of the reasons for those less familiar with the trade-offs.

Contrary to what some posters believe, a "state" exchange isn't a state exchange at all, it's a total federal takeover. HHS controls every detail, excepting that we have to pay for it, whereas we don't have to pay for an openly federal exchange. Might as well go federal.

So, it's bogus to say the governor's choice has contradicted the idea that states do things better--there was no choice. Obamacare is force; it doesn't allow choices.

And, it would be the height of folly to take responsibility for something without even knowing the rules, where the rules can (and will) change at any time, something you have to pay for, but which someone else controls. Might as well let them do it, pay for it, and own it.

That's what the governor recognized, that's why he decided as he did, and that's why 22 other governors before him reached the same conclusion, Democrats and Republicans.

Proponents of federal health-control should be pleased--there will be a federal health-control exchange.

Meanwhile, the health care costs in Massachusetts have gone from 21pct of the state budget in 2001 to 54pct today. As health spending soared, school spending has dropped, as has spending on roads, police, and other services. We shouldn't go there.

Gov. Haslam did the right thing. Thanks Governor.

By: Moonglow1 on 12/12/12 at 11:08

Moonglow1: The federal government will do a much better job of developing, implementing, and managing the exchanges than our inefficient tea party controlled legislature.

By way of history, the Affordable Health Care act was originally conceived by a right wing think tank (Heritage Foundation).

I do hope that the federal health care exchanges will be a precursor to a national health insurance plan. We can certainly afford it. All we need to do is stop taxpayer funded entitlements to multinational corporations and state funded entitlements to billion dollar companies like HCA. We need entitlement reform (corporate welfare stopped).

By: TMR on 1/4/13 at 10:30

I am fine with Tennessee managing the exchanges or the Federal government. People need insurance. They also need clear direction as to how they can obtain insurance. The exchanges will insure many people who do not have access to health care insurance. These people are costing the health care providors a lot of $$$. They get sick and then the providors must see them for free. At least with the health care exchanges hospitals can get paid a little instead of nothing.