Health & Science
9:49 am
Fri November 16, 2012

Why Walker Said 'No' to State-Run Health Insurance Exchange

Gov. Scott Walker announced Friday that Wisconsin will not create its own health insurance exchange, as part of the federal Affordable Care Act. Walker says he will leave the responsibility to the federal government.

Gov. Walker announced his decision Friday.
Credit Chip Somodevilla/Getty Images

Updated: Gov. Walker's Statement

In a letter to the U.S. Department of Health and Human Services, Walker said:



The Patient Protection and Affordable Care Act (PPACA) gives states three options in building health insurance exchanges: an exchange built and managed by an individual state subject to federal mandate; a partnership plan requiring the state to perform functions on behalf of the federal government; or a federal exchange developed by the federal government.

While the three options differ in who initially builds and operates the exchange, all three options are identical in that they are governed and controlled by federal policy.

No matter which option is chosen, Wisconsin taxpayers will not have meaningful control over the health care policies and services sold to Wisconsin residents.

If the state option is chosen; however, Wisconsinites face risk from a federal mandate lacking long-term guaranteed funding.

In Wisconsin, we have been successful in providing health insurance coverage to over 90 percent of state residents without the creation of an exchange and absent federal regulation.

We have a long history of being a leader on health reform issues, and with more guidance and greater state flexibility, our competitive market system would have ensured health insurance coverage to the most vulnerable Wisconsinites without federalization of our market.

Unfortunately, operating a state exchange would not provide the flexibility to meet our state’s unique needs or to protect our state’s taxpayers.

Therefore, after much consideration and outreach with citizens across the state, and in the best interest of the taxpayers of Wisconsin, we have determined Wisconsin will not develop a partnership or state-based exchange.

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Updated: Groups React

Wisconsin Manufacturers and Commerce, which had backed the creation of a state-run exchange, put out a news release Friday saying the group believes the governor makes a good case for not developing a state exchange.

The Wisconsin Hospital Association also put out a news release. In it, WHA Executive Vice President Eric Borgerding says: "We have never believed that a one-size-fits-all federal government approach to an exchange can do a better job than we can in Wisconsin. We are hopeful that this is not the final chapter, that obstacles preventing Wisconsin from choosing to run its own exchange can still be addressed down the road."

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More than 10 other states have also decided to rely on the federal government to run their insurance exchanges.

About as many are moving forward, creating their own state-run health insurance exchanges. Kentucky is one of those states in the midst of setting up an exchange. Its online insurance marketplace will list prices and coverage side by side – similar to the way travel-comparison websites list hotel rates and airfares.

Signs pointing to Walker’s decision to use the federal government to run Wisconsin’s exchange have been a long time in coming.

Walker has faced political pressure from both sides of the aisle in forming his decision. Business groups, Democrats, hospitals and others had urged Walker to back a state-run exchange, saying it would better serve Wisconsin companies and health care consumers.

Some of Walker’s fellow Republicans oppose the state-run exchange because they disagree with the concept of the Affordable Care Act. Christopher Murray, a lecturer at Marquette University's Les Aspin Center for Government in Washington, D.C., believes that over time only people on the fringe will scorn the Affordable Care Act.

Nine GOP Wisconsin legislators and incoming lawmakers informed a Virginia-based Tea Party group, that they favor arresting any federal employees who enact an exchange for Wisconsin. Gov. Walker’s office responded with a statement, saying he "doesn't support arresting people for implementing federal law."