Correction: Health Overhaul-Indiana story

Associated Press Modified: November 15, 2012 at 12:31 pm •  Published: November 15, 2012
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Behind the scenes, however is a much more complicated situation involving political positioning and determining whether officials in Indiana or Washington, D.C., will bear the responsibility of building an extensive new health care infrastructure for the state.

Pence's opposition to a state-run exchange may be based on principle, but it's also smart politics, said Bob Laszewski, president of Health Policy and Strategy Associates, a Washington-based firm advising health insurers on the new law.

If the Obama administration builds and runs an exchange it would not only bear the costs but also the responsibility for any failures, he said. And if the exchange is a shining success, Pence can swoop in and take it over after a year, he said.

"There's really no downside to Pence in letting the feds come in and build an exchange because he can come in and take it over within a year," he said.

It could also save Indiana money. The Pence campaign estimated building an exchange would cost the state $50 million a year. Pearson pointed out, however, that the Obama administration is offering grants to states to offset most, if not all, of that cost.

Mike Ripley, Indiana Chamber of Commerce vice president for health care policy and workforce safety, said there could be some leeway for Pence if he places residents in the federal exchange because of a possible loophole that would allow employers to avoid penalties for not covering workers. That theory has not been tested in court, he notes, but is popular among conservatives and being pushed by the Washington-based Cato Institute.

The chamber is pushing for the state to run its own exchange, despite the new costs, because of the autonomy that would come with such a move. Ripley notes that adding to the uncertainty from the incoming Pence administration and the federal government, is the potential the Indiana General Assembly will want a say when it reconvenes in January.

"Our opinion about all of these things is very fluid," he said. "There's so much uncertainty."