IA: Governor opts for federal-state combo health exchange

By   /   December 14, 2012  /   No Comments

By Sheena Dooley | Iowa Watchdog

DES MOINES – Iowa Gov. Terry Branstad reversed course Friday with the announcement the state will partner with the federal government in setting up a healthcare exchange.

Gov. Terry Branstad reverses course and opts for a state and federal combination health exchange.

The exchanges, which go into effect next fall, are required under President Barack Obama’s healthcare reforms and provide small businesses and individuals compare and buy health insurance. States have the option of creating their own exchange, opting into the federal government’s model or creating a state and federal hybrid, according to the law.

Branstad’s decision to partner with the feds allows the state to avoid paying an estimated $15.9 million to set up its own state-run program. It also keeps intact its regulatory oversight of the health insurance industry and ability to run healthcare programs such as Medicaid and Children’s Health Insurance Plan.

Iowa will rely on the federal government to set-up and run the web-based exchanges, while also overseeing a federal call center, Branstad said.

“Gov. Branstad assures Iowans that Iowa will not be forced or bullied into significant costs that sink our budget, and we will continue to maintain the high quality of health care access in Iowa that covers more than 90 percent of our residents,” his administration said Friday in a news release.

Branstad initially said he would opt for a state-run exchange but now says there isn’t enough federal guidance to do so. He has come under fire by Democratic lawmakers, who say dragged his feet in setting up the state exchange in hopes that the U.S. Supreme Court would strike down the healthcare law, which didn’t happen.

The Governor was one of a handful that signed onto the lawsuit challenging the law. He said in his letter to Kathleen Sebelius, head of the U.S. Department of Health and Human Services, that he doesn’t believe a health benefits exchange will improve the quality of healthcare or lower the cost. Nor will it make Iowans healthier, he said.

“The cost of building and maintaining a state-financed and based exchange, estimated at $15.9 million annually, would not advance the health of Iowans and would not be a prudent option,” he said in the letter.

Reach Sheena Dooley at dooley@iowawatchdog.org and follow her on Twitter (@IAWatchdog).

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Sheena Dooley