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Ala. governor: No to health insurance exchange

Associated Press Modified: November 13, 2012 at 3:46 pm •  Published: November 13, 2012
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BIRMINGHAM, Ala. (AP) — Alabama's governor set up a showdown with the federal government Tuesday when he announced the state won't create a health insurance exchange under the federal Affordable Care Act or use the law to expand Medicaid to cover more low-income Alabamians.

"The reason we are not going to do either one of those is we just cannot afford it, not only in this state but in this nation," Gov. Robert Bentley told the Birmingham Business Alliance.

The Republican governor said he expects at least half the states to make the same decision in an effort to block implementation of the law and force Congress to make changes in "the worst piece of legislation ever passed in my lifetime."

"If we stand together, I do believe Congress is going to have to look at this again," Bentley, a physician, said.

Friday is the deadline for states to notify President Barack Obama's administration whether they will create a state exchange or let the federal government implement one for them. Bentley said he anticipates widespread opposition among governors because he's already talked to 25 of them and will talk to more on Thursday at a Republican governor's meeting in Las Vegas.

The Republican governors of Louisiana, Florida and South Carolina have already declined to create exchanges under the federal guidelines.

"It seems like a national movement by Republican governors not to create these exchanges," said the state Senate's Republican leader, Jabo Waggoner of Vestavia Hills. He said Bentley's decision has strong support among Republican legislators.

The exchanges are scheduled to start in 2014 and will give the uninsured a place to price insurance and apply for subsidies for coverage.

Bentley was one of 21 Republican governors who complained to the Obama administration that states needed more flexibility in deciding which companies participate and what benefits are covered. A commission Bentley created last year estimated an exchange could cost Alabama nearly $50 million a year to operate.

"I don't believe the people of this state want a $50 million tax placed on them at this time. I certainly do not," he said.

The Democratic leader of the Alabama House, Craig Ford of Gadsden, said he was disappointed by Bentley's decision.

"Because the governor has refused to follow the law, the federal government is going to set up the exchange anyway and without any input from the people of Alabama," said Ford, who is considering running for governor in 2014.

Bentley said if the federal government tries to set up an exchange in Alabama, he will consider it an unconstitutional attempt by the federal government to create a state agency and will consider filing a states' rights lawsuit.

Alabama's Medicaid program currently serves more than 900,000 in Alabama, or about one out of every five residents. A new study by the University of Alabama at Birmingham estimates the Affordable Care Act could add 260,000 to 330,000 adults and children whose household incomes are below 139 percent of the federal poverty level.

The federal government would pay for the expansion for three years, and then the state would pick up a small portion of the cost.

Bentley said the structure of Medicaid is financially unsustainable and the only way he would consider an expansion is if major changes occur, such as the federal government giving block grants to the states and leaving eligibility decisions to the states.

Waggoner said the state can't afford an expansion of Medicaid. "Medicaid is about to bankrupt the General Fund budget now," he said.

The Senate's Democratic leader, Roger Bedford of Russellville, said Bentley is displaying a "total lack of leadership" and denying Medicaid coverage to about 7 percent of Alabama's citizens.

State Health Officer Don Williamson, who is overseeing Alabama's Medicaid Agency in the absence of a permanent director, said the governor doesn't want to expand Medicaid until its funding and other issues are corrected. "By just adding to the system, you don't make anything better," Williamson said in Montgomery.

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Associated Press writer Bob Johnson in Montgomery, Ala. contributed to this report.