Will Ohio’s Tea Party Lieutenant Governor settle for a federally-run health insurance exchange?

On January 18, 2012, a report from the White House provided an update on the progress made by States in the implementation of Health Insurance Exchanges (Exchanges). It said that 28 states were on their way toward establishing their own state-run Exchanges, which is a key aspect of the Affordable Care Act (ACA).

The 28 states on this list had both Democratic and Republican Governors, and had applied for federal funding to plan and establish Exchanges. While moving at different paces, the report indicated that the states demonstrated a “diversity of approaches and progress.”

Not unexpectedly, to those who’ve been paying attention, Ohio was not on this list. While the Governor and Lieutenant Governor have flirted publicly with the idea of an Ohio-run exchange, they have been difficult to pin down:

“We want to create an exchange, but we don’t want an Obama exchange…the idea of a place where people can shop and small businesses can shop, I fully support the idea…We have to get in position for this because we don’t want the federal government coming in here and dictating an exchange,” (Gov. Kasich, July 2011)

Exchanges should be “a pure marketplace for competition” not “an extension of the regulatory arm.” (Lt. Gov. Taylor, November 2011)

In order to plan for and implement a state-run Exchange (and to qualify for federal startup funds) states must: pass legislation, decide upon a structure and governance, do research and analysis on newly eligible individuals and small businesses purchasing policies from the Exchange, conduct public stakeholder meetings with healthcare stakeholders, conduct research and analysis on how to operate sustainably and be financially self-sustaining, establish their IT infrastructure, work on public education and outreach, and integrate the Exchange with Medicaid.

That’s a lot of planning. Fortunately, thus far, the federal government has awarded $730 million in grants to states for these planning efforts. The federal grants provide States with benchmarks in order to qualify for startup funding – finding that expires the end of 2014. As per the ACA, if states do not meet the above benchmarks, they will have to then opt into a federally-run and implemented Exchange.

Ohio made a promising start in 2010, under former Governor Ted Strickland, but almost immediately began undoing and dismantling a state-based Exchange under the tenure of Lt. Governor and Insurance Commissioner Taylor. In one of her earliest actions, Taylor disbanded Ohio’s Health Insurance Exchange Task Force in February of 2011 (but not before using the previously-awarded Exchange Planning funds to commission three new studies). This was soon followed by Taylor’s official tirade against “Obamacare” via a string of press releases.

It would be ironic, then, if the Lt. Governor, a vocal foe of federal healthcare, would take actions that would result in the imposition of a federally-run insurance exchange for Ohio.

The issue has gained attention and pressure from both Ohio Democrats and Republicans recently, with both parties expressing interest in introducing legislation to enact an Ohio-based Exchange. And when the alternative is a federal government-imposed and managed exchange, Lt. Governor’s earlier railing against “Obamacare”, may now give way to call for an Ohio Exchange. It has been recently reported that Ohio may be ready to finally consider moving forward, with the Governor “expected to at least consider the measures to avoid, ‘federal takeover’ as implementation deadlines loom.”

Given the heated rhetoric of the administration, it will be interesting to see how the fissures within the GOP—with its Tea Party anti-Obamacare activists and those friendly to the insurance industry—play out in Ohio. Will they come out with a weak industry friendly Ohio-based Exchange, a well-regulated Ohio-based Exchange with robust consumer protections, or stay on the current course to have a Federal Exchange imposed upon us?

Hopefully, all the talk about “state-flexibility” and “state-rights” and the turn to an Ohio-based Exchange, will be a genuine state-based attempt to make robust quality affordable healthcare for uninsured and underinsured Ohioans.