Gov. Walker Won't Create Health Care Exchange In Wisconsin

By Amy Cavanaugh in News on Nov 18, 2012 4:00PM

Gov. Scott Walker and 14 other Republican governors around the country have decided not to create state healthcare exchanges, instead ceding the task to the federal government. The government will be setting up an online insurance marketplace as part of the Affordable Care Act.

The move is interesting, since Republicans don't usually like to give the federal government more control. Democrats and health insurers were encouraging Walker to create an exchange for Wisconsin, and the Milwaukee Journal-Sentinel says that "in a conference call with reporters, Walker said that he preferred state-run programs 'just instinctively as a states' rights issue' but didn't feel he had enough control to put into place his conservative vision of a free-market exchange."

The Journal-Sentinel reports:

In a letter Friday to U.S. Health and Human Services Secretary Kathleen Sebelius, Walker argued that Wisconsin has been able to provide health insurance to more than 90% of state residents without a health care exchange; wouldn't have enough freedom to design the exchange under federal rules; and could face undisclosed costs to Wisconsin taxpayers by running the exchange itself.

The state would comply with the federal law where required, he said.

"No matter which option is chosen, Wisconsin taxpayers will not have meaningful control over the health care policies and services sold to Wisconsin residents," Walker wrote. "If the state option is chosen, however, Wisconsinites face risk from a federal mandate lacking long-term guaranteed funding."

Under the law, the exchanges must be self-sufficient and will be funded by a tax, or assessment, on health insurance companies. But the tax will be imposed whether an exchange is run by a state or the federal government.

The Tribune reports that "by not setting up its own exchange, Wisconsin will lose control over several key decisions over how easily consumers will be able to compare insurance plans, what plans can be sold through the exchange, what the plans must cover and their cost. Additionally, the exchanges will offer coverage to people buying in the individual and small business markets, and those are areas that states have traditionally regulated. Without a state-run exchange, states would undercut the role of their own regulators in an important new market."

Opponents of Walker's decision include U.S. Sen.-elect Tammy Baldwin, who said in a statement, "Instead of leading and working together to move a 'made in Wisconsin' health insurance marketplace forward, Governor Walker chose to pass the buck and reject the opportunity to take ownership of this issue."