Governor McDonnell has informed the Obama administration that Virginia will not create its own health care exchange under the federal health care overhaul law. The governor says in a letter to the Department of Health and Human Services that there is insufficient information to do so. It means the federal government will operate the program in our state.
(Continue reading to see the governor’s full news release.)
RICHMOND – Governor Bob McDonnell today submitted a letter to Health and Human Services Secretary, Kathleen Sebelius, declaring that Virginia will not be pursuing a state-based health benefits exchange for 2014. States were required to submit no later than today, a blueprint application requesting conditional approval for a state-based exchange. States have until Feb. 15, 2013 to signal their intent to participate in a hybrid model or default to a federally facilitated exchange.
“For months, Virginia has asked the Obama administration to provide clear guidance and comprehensive answers to important questions that would determine major components and financial impacts to the Commonwealth should we decide to run our own exchange,” Governor McDonnell said. “Originally, I asked that we begin the planning process to potentially operate a state-based exchange for Virginia, primarily so we would be in control of this process. However, despite repeated requests for information, we have not had any clear direction or answers from Washington until recent days, and we cannot conclude, as we review those materials, that we would have the control and flexibility needed to efficiently and effectively run our own state exchange. If Virginians are faced with running a costly, heavily regulated bureaucratic exchange without clear direction from Washington, then it is in the best interest of our taxpayers to let Washington manage an exchange at this time. We would like the ability to control our health insurance marketplace, and will continue dialogue with the federal government to clearly understand the logistics of this option before making a decision.”
Under the Patient Protection and Affordable Care Act, by Jan. 1, 2014, states are required to establish an insurance marketplace primarily for individuals and small businesses. The law details that if a state does not establish (or decides not to establish) its own exchange, the federal government will run an exchange for the state. In addition to the two models described in statute, the federal government has also created a hybrid model where states are able to control portions of an exchange while relying on the federal government to provide the remaining functions.
The McDonnell administration will continue to analyze long-awaited and recently released proposed rules and guidance from the federal government. Additionally, the administration is seeking information regarding what, if any, established links will be made between the federal hub and state systems. The focus over the next weeks through the leadership of Secretary of Health and Human Resources Dr. Bill Hazel, will be to continue to analyze information made recently available by the federal government to help facilitate future decisions that are in the best interest of all Virginians and affiliated industries and partners.