Haslam decides to pass on state-run health insurance exchange

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 [1] 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 [2].

“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 [3] 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 [1].

A Tea Party rally outside the state Capitol [4] 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.

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Letter to Secretary Sebelius.pdf [2]	98.4 KB