Nov. 09--Gov. Bob McDonnell has done an about-turn on the establishment of a state health benefits exchange in Virginia. In August 2010, just months after the passage of the Affordable Care Act, or "Obamacare," McDonnell set up the Virginia Health Reform Initiative, VHRI, and named members of its advisory council.
In doing so, he set in motion the framework to establish a state-run health exchange. On Wednesday, in a post-election press briefing, McDonnell conceded that Virginia would not meet the Nov. 16 deadline for a blueprint for the state-run exchange and would default instead to a federally run insurance exchange. "The only logical decision is to choose the federal option," he said. "I don't have the answers for Virginia. They're telling us we have two years to build an exchange. It's expensive....I don't want to buy a pig-in-a-poke for Virginia taxpayers."
The Affordable Care Act mandates that each state have its own health benefits exchange by Jan. 1, 2014 to offer affordable insurance options to individuals whose employers don't offer health insurance and to small businesses. The insurance plans must include mandated minimum benefits and meet certain cost controls. Under the Affordable Care Act, the states have the option of running their own exchange, partnering with the federal government, or allowing the federal government to run the exchange for them. Sixteen states have already established their own.
In fall 2010, Virginia received a $1 million federal grant to jump-start a state exchange and the VHRI duly established task forces in six key areas, including Medicaid reform and the establishment of an insurance exchange. A year later, in November 2011, McDonnell wrote a letter to leaders of the legislature, expressing his ambivalence: "Of significant concern is that if Virginia does not create an operational exchange, the federal government threatens to operate a federally facilitated exchange in the Commonwealth. ... Without the necessary guidance and rules that will govern a Virginia exchange and a federal model to review, it is extremely difficult to evaluate whether ceding control of an exchange to the federal government or creating our own is in the Commonwealth's best interest. As Governor, I will act in the best interest of Virginians to mitigate against unfounded federal intrusion."
Though the VHRI report with its recommendations regarding the structure and governance of a state-run health benefit exchange was then submitted for consideration to the 2012 Virginia General Assembly, McDonnell urged a wait-and-see stance and all related bills were duly tabled.
After the U.S. Supreme Court's July ruling upholding the Affordable Care Act, McDonnell continued to delay further action on a state-run health exchange as the Republican platform promised the bill's repeal.
On Wednesday, McDonnell acknowledged that repeal was no longer realistic and that a state exchange would go into effect -- but under federal auspices. He noted that the deadline for grants had been extended to October 2014, which would allow Virginia to see how the exchange worked under federal control first. "We would still have an option into the future," he said.
The governor also confirmed his opposition to the expansion of Medicaid under the Affordable Care Act. "We cannot be penalized for failure to expand," he said, noting that the joint federal-state health program accounts for 21 percent of Virginia's budget. "It would be irresponsible to expand without substantial reform. This is the time for a serious discussion about this entitlement."
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