The GOP-run state House of Representatives is holding up legislation pushed by Gov. Rick Snyder to create a Michigan health insurance exchange, which threatens to leave the state with a federal marketplace where consumers shop for health coverage.
Many House Republicans are rejecting the wishes of their fellow GOP governor, arguing that they don't want to prematurely install federal health requirements they consider faulty and unconstitutional.
State House Speaker Jase Bolger, R-Marshall, said Friday that the House wants to wait until after a U.S. Supreme Court ruling on President Barack Obama's federal health reforms to decide its next steps on the exchange.
"The governor and I are not in agreement on this issue," he said. "The rights of our citizens to control their own health care is more important than an IT (information technology) deadline."
Michigan Attorney General Bill Schuette is supporting the legal effort to get the federal reforms declared unconstitutional.
State Rep. Chuck Moss, R-Birmingham, who chairs the House Appropriations Committee, also said the GOP caucus doesn't want to act unless it has to.
"We don't like Obamacare; we don't like national health care. We don't think it's good for the country; we don't think it's good for Michigan," Moss said. "We don't want to be early adopters and go down that road if we don't have to."
But if a Supreme Court decision isn't made until late June — normal for high-profile cases — some proponents of a Michigan exchange fear the state won't meet a Jan. 1, 2013, deadline to create its own exchange — essentially a website such as Orbitz.com or Travelocity.com for consumers and small businesses to compare and enroll in health insurance.
A federally created exchange could limit consumer choice, with possibly only major national carriers on the exchange, said Rick Murdock, executive director of the Michigan Association of Health Plans, which represents 17 health plans covering more than 2.1 million Michigan residents.
"We may be left with a system that doesn't work best for Michigan," Murdock said.
Snyder wanted legislation for a state exchange by Thanksgiving. In November, the state Senate approved legislation to create the MiHealth Marketplace — a clearinghouse of insurance information that would be run by a nonprofit and paid for by user fees from insurance companies. But the House didn't act.
Snyder last week in his State of the State address called on the Legislature to approve an exchange, cautioning that not acting will result in a program designed by the federal government instead of Michiganians.
The state estimates about a half-million people would use a Michigan exchange to buy coverage, many of whom will be eligible for federal subsidies to help buy health insurance.
An estimated 400,000 to 600,000 additional state residents will be eligible for Medicaid under health care reform changes coming in 2014 and could use the exchange to enroll in the health program for low-income residents, Murdock said.
The subsidies will be available for individuals and families who meet income requirements, including up to $89,400 for a family of four, who aren't eligible for employer coverage or coverage through a government program.
The Urban Institute, a nonpartisan research group in Washington, D.C., estimates that $1.3 billion in subsidies will flow through Michigan's exchange in 2014, according to the state.
This past week, the state House Health Policy Committee heard testimony from the public on creating an exchange, one of about 10 weeks of testimony so far on the issue, said Rep. Gail Haines, R-Waterford Township, the committee chairwoman.
Haines said the committee is taking a deliberative approach, but if the Supreme Court finds health reform constitutional, the House will be ready to act.
"Rest assured, we are not going to have this run by the federal government," she said.
But in December, the House did not include appropriation for about $9.8 million in federal government funding the state was granted in November to further efforts to create an exchange. The state has 12 months to spend the money, said Steven Hilfinger, director of the Michigan Department of Licensing and Regulatory Affairs.
While almost $10 million hangs in the balance, the state faces a June 29 deadline to apply for a second federal grant to pay for creating the exchange. That application requires the state to have passed legislation for a health exchange.
"This is a very complex IT project," Hilfinger said. "It includes a lot of interfaces with the business community, with health care insurers, with health care providers, the federal government."
Some Republicans fear the delay could be costly. State Sen. Jim Marleau, R-Lake Orion, who introduced the Senate health exchange bill, said a state exchange will allow for competition and help keep health insurance rate increases smaller.
"We're losing one by one the days that we control our destiny," Marleau said.
Michigan Consumers for Healthcare, an organization including groups such as the Detroit Wayne County Health Authority and AARP of Michigan, also wants immediate action on legislation and approval of an appropriation for the grant money.
Delays on a health information exchange for the uninsured could lead to confusion among consumers, Murdock said.
"That confusion can lead toward disappointment, anger even," Murdock said. "We're going to take the heat for it, even though it's largely due to actions that are beyond our ability to control."
mburden@detnews.com
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Q. What is a health exchange?
A. It is a government-required place where consumers without health coverage can find information about health insurance plans in their state.
Q. When will the health exchange start?
A. In 2014.
Q. Why must the Legislature make a decision on creating an exchange?
A. Federal health care reforms require it. States can set up their own by a Jan. 1, 2013, deadline or let the federal government set up one for them.
Q. How might a state exchange work?
A. The Michigan Senate’s proposed exchange would operate similar to a website such as Orbitz.com or Travelocity.com for health insurance. Consumers and small businesses could learn if they qualify for federal subsidies to help with premiums, compare coverages and enroll in health plans.
Q. Who would run and monitor the proposed state exchange?
A. It would be run by a by a nonprofit and overseen by an independent board of seven members — five appointed by the governor, one by the Senate majority leader and one by the House speaker.
Q. How much would it cost for the state to create the exchange?
A. The state doesn’t have an estimate on the cost.
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