McDonnell: State will not pursue its own health benefits exchange

The old saw about PR is that if you have news that you need to get out, but really don’t want getting out, you do it on a Friday, the later in the day, the better. In that context, then, we have the news release from the McDonnell administration issued at 4:35 p.m. Friday reporting that Virginia will not be pursuing a state-based health benefits exchange for 2014.

“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,” Gov. Bob McDonnell said in a statement. “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.”

The McDonnell administration news release reported that the governor has 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.

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 PR issued today said the 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.