Walker's decision to hand off creation of health insurance exchange riles Democrats

  • Article by: SCOTT BAUER , Associated Press
  • Updated: November 16, 2012 - 4:11 PM
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Wisconsin Governor Scott Walker

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MADISON, Wis. - Gov. Scott Walker's decision to hand off creation of an online marketplace to connect Wisconsin consumers with private health insurance providers riled Democrats and others who hoped he would support a state-run exchange despite his opposition to the federal law.

But Walker stayed true to his longtime opposition to President Barack Obama's Affordable Care Act, derided by Republicans as "Obamacare," with his decision Friday to join with other Republican governors in ceding authority for creating the exchanges to the federal government.

The move pleased Republican state lawmakers and tea party groups that had urged Walker to stand firm against becoming more involved with a successful implementation of the law. But his decision ran contrary to several conservative business and health care groups, including supporters of broader coverage, that joined together to call for a state-run exchange.

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.

In addition, the exchanges 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 undercut the role of their own regulators in an important new market.

In the end, a resolute Walker said his motivation was protecting Wisconsin taxpayers from being saddled with costs for running the exchange years down the road. But when asked how much those costs could be, Walker had no estimate. His spokesman later said the state Department of Health Services estimated it could be as much as $60 million a year.

Democrats said Walker's concern over the costs of the exchange was disingenuous, noting that he earlier rejected $38 million in federal money that could have gone toward paying for it. Also, federal law requires the exchanges to be self-sufficient by 2015.

Walker told reporters on a conference call that the idea of a state-run exchange was a mirage, saying it would be "state in name only." The phrase quickly gained traction on Twitter and among conservative talk radio hosts who said Walker coined a new term to describe the exchanges: SINO.

Those advocating for a state-run exchange weren't able to articulate why that was the best approach, Walker said.

"The answer has essentially been a shrug," he said.

One of the most prominent supporters of a state-run exchange was Walker supporter and powerful lobbying force Wisconsin Manufacturers and Commerce, the state's chamber of commerce.

President Kurt Bauer declined to criticize Walker's decision, saying the governor made a "good case" for not doing what the group wanted. Bauer said WMC will continue to work with Walker and the state's businesses to "navigate through the burdensome requirements of the Affordable Care Act."

Other groups that called on Walker to create a state-run exchange included the state chapter of the National Federation of Independent Businesses, the Wisconsin Hospital Association, health care advocacy groups that support universal health care and the state's insurance industry.

Debate over Walker's decision quickly broke down along standard political lines, with Republicans praising it and Democrats castigating Walker as kowtowing to extremists who believe the Affordable Care Act will be repealed even after the president's re-election.

"It is astounding that Walker is putting the demands of ideological extremists over the interests of health care consumers across Wisconsin who need access to quality affordable health care options," said Robert Kraig, director of the liberal advocacy group Citizen Action.

U.S. Sen.-elect Tammy Baldwin, a Democrat and supporter of the health care law, said Walker "chose to pass the buck and reject the opportunity to take ownership of this issue."

Incoming Republican state Assembly Speaker Robin Vos said Walker was protecting taxpayers from what he said "could ultimately become a major financial catastrophe."

State Sen. Alberta Darling, R-River Hills, co-chair of the Legislature's budget committee, said, "It would be irresponsible to commit our state to a program that isn't fully defined yet," she said.

Opposition to the law remains strong among Republicans. Nine Wisconsin GOP lawmakers went so far as to tell the tea party group Campaign for Liberty that they would back legislation to arrest federal officials who took steps to implement the Affordable Care Act.

Walker stopped implementation last year on the hopes the law would be overturned either by the U.S. Supreme Court or Republicans following the November election. But the Supreme Court upheld the law in June and Obama's victory earlier this month ensured the law's survival.

Walker said despite his opposition to the law, his decision to have the federal government run the exchange in no way means he will stand in the way of it being implemented.

"We're not going to refight the Obamacare debate," he said. "We are going to comply with the law."

As of Friday, 23 states plus the District of Columbia said they would run their own exchanges or partner with the federal government while 15 states, including Wisconsin, said they would defer to the federal government. Twelve states had yet to decide.

Walker announced the state's intent even though the Obama administration late Thursday agreed to a request by Republican governors for a month's extension for making a decision.

The law is expected to provide coverage to more than 30 million people nationwide through the exchanges and expanded Medicaid programs. The Medicaid expansion is voluntary and Walker said Friday no decision had been made on whether Wisconsin will do it.

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