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Virginia Awaiting High Court on Health Insurance

Ernie Shannon's picture

Even as the Obama administration is touting its success in convincing Republican governors to create health insurance exchanges, one very prominent GOP governor in Virginia is urging his legislature to delay a decision on a state exchange.

Virginia Governor Bob McDonnell wants the state legislature to postpone debate and decisions regarding the creation of a health insurance exchange until after the U.S. Supreme Court hears the case in March and makes a decision in June. It is expected that the court will at least rule on the constitutionality of the Affordable Care Act’s federal mandate that all Americans purchase some kind of health insurance coverage. Opponents of the law hope the court will decide the overall constitutionality of the statute and strike it down.

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In an effort to kick-start the implementation of various provisions of the health care law, the Department of Health and Human Services (HHS) awarded 48 states and the District of Columbia “planning” grants in September 2010 totaling $50 million. The administration hoped that states would use the funds to lay the groundwork for establishing health insurance exchanges in their states. Virginia was one of those 48 states receiving $1 million. A year ago, HHS awarded Early Innovator grants to another six states individually and a multi-state consortium to develop the information technology needed to support state-based exchanges. Since then, three rounds of establishment grants have been given to 28 states with the latest round of money-giving coming in February.

So far, this legislative session in Richmond has produced six bills featuring various methods of setting up a health insurance exchange and thereby qualify for additional money. However, lawmakers fear that failure to select an option and move forward will hurt the state. The law requires states to have exchanges in place by January 2014 or face the prospect of the federal government moving into to create and run the exchange.

Virginia is not alone in taking its time to focus on the exchanges. Alaska, Arkansas, Colorado, Florida, Georgia, Kansas, Louisiana, Montana, New Hampshire, New Jersey, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Wisconsin, and Wyoming have all been debating the establishment of health insurance exchanges and, in some cases, waiting to see the Supreme Court decision in June. The question is, will those states have sufficient time to set up an exchange so that it is fully functioning by January 2014?

The governor and many state legislators think there will be more than enough time. Governor McDonnell has said that there is no need to rush an untimely decision on health insurance exchange during the 2012 Virginia legislative session.