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Pressure on Walker increases over health exchange

Associated Press Published: November 13, 2012

MADISON, Wis. (AP) — Democrats in Wisconsin's congressional delegation on Tuesday urged Gov. Scott Walker to implement a state-run health insurance exchange rather than cede control to the federal government.

Walker faced a Friday deadline to notify President Barack Obama's administration whether Wisconsin will run its own virtual marketplace where people without health insurance could shop for private coverage, have the federal government do it, or create a hybrid. The exchange would begin operating in 2014.

Walker spokesman Cullen Werwie said the governor would announce his decision Thursday or Friday. Walker has been meeting privately with the state Insurance Commissioner Ted Nickel, Department of Health Service Secretary Dennis Smith and other top advisers to chart a path.

Walker was out of the office Tuesday, on his way to the annual Republican Governors Association meeting in Las Vegas where implementing the exchanges was sure to be a hot topic.

Democrats who favor the state-run exchange find themselves in the position of urging Walker, along with Republicans who control the state Legislature, to take control of the process instead of the Obama administration.

Walker should involve a bipartisan group of decision makers in designing the best possible system for Wisconsin, said state Rep. Jon Richards, who joined 17 other state Democratic lawmakers last week in calling for a state-run exchange.

Ceding control of creating the exchange to the federal government would result in important decisions being made in Washington instead of Wisconsin, Democrats in the state's congressional delegation told Walker in a letter sent Tuesday.

"Should state leaders ever want to establish an exchange, relinquishing control to the federal government now would make it much more difficult to pursue state adoption in the future," the Democrats said.

The letter was signed by U.S. Sen. Herb Kohl and U.S. Reps. Tammy Baldwin, Ron Kind and Gwen Moore. Mark Pocan, who was elected to Congress in November, also signed.

At least 17 states and the District of Columbia are on track to set up their own exchanges, while 10 have decided against it.

A variety of other health care and business groups have called on him to pursue a state-run exchange, including the powerful Wisconsin Manufacturers and Commerce, which has supported Walker, the Wisconsin Hospital Association, the state chapter of the National Federation of Independent Businesses and both of the state's health insurance associations. The NFIB was a lead plaintiff in the Supreme Court case that failed to overturn Obama's health-care reform law.

States that decide to set up their own exchanges have until Dec. 14 to submit details to the federal government.

There are several potential benefits to the state operating its exchange.

The biggest advantage may be that states would be more closely involved with the coordination between the exchanges and their Medicaid programs. Because many people are going to be going back and forth between Medicaid and private coverage in the exchanges, states would likely be better served by being directly involved.

States also can decide whether to allow open access to all insurers, or only work with a panel of pre-screened companies that meet certain requirements.

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

When the legislation was being considered in Congress, liberal Democrats in the House wanted to have a national exchange administered by federal government. But they were forced to concede the argument to their centrist Democratic counterparts in the Senate, who wanted state exchanges to preserve the state role.

Walker was a staunch opponent of the law and stopped all implementation until after last week's election, on the hopes that Obama would lose and the law would be repealed. But with Obama's victory, and Democrats retaining control of the U.S. Senate, the pressure is now back on Walker to make a decision about moving forward.

Walker has also declined to expand Medicaid coverage as allowed under the law. The U.S. Supreme Court in June made that expansion — which could make coverage available to about 170,000 people in Wisconsin — optional with no deadline for deciding.

A recent AP poll found that 63 percent of Americans want states to run the exchanges, with 32 percent favoring federal control.


Associated Press writer Ricardo Alonso-Zaldivar contributed to this story from Washington, D.C.


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