Conservatives battle insurance exchanges

6:04 AM, May 30, 2012   |    comments
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WASHINGTON (USA TODAY) - Conservative organizations have canvassed the country in recent months to try to persuade state legislators not to pass bills to create health insurance exchanges.

"Over the last eight to 10 months, we've seen a huge change in course," said Christy Herrera, health task force director of the American Legislative Exchange Council (ALEC). "Before the deadline, states have the time to carefully deliberate. ... They shouldn't be pressured."

Without state exchanges, the federal government will be unable to implement the 2010 health care law, ALEC, the Cato Institute and other conservatives say. Exchanges are websites where consumers can compare costs and benefits of available insurance plans in the state, as well as buy insurance.

Ten states have delayed acting on exchanges because of the groups' influence, according to ALEC.

Administration officials and some policy conservatives say the theory by ALEC and the Cato Institute is misguided. The federal government is paying for the start-up exchanges, and the law gives the states the flexibility to run their own programs. The Department of Health and Human Services announced this month that 34 states have accepted grants to pay for exchanges. If states don't create exchanges, their residents can participate in a federal program.

Delays are shortsighted, said Cheryl Smith of the exchange practice of Leavitt Partners, a health care group run by former HHS secretary Mike Leavitt, a Republican. "States need to set up legislation to protect themselves," she said.

Republican Alabama Rep. Greg Wren, an ALEC member and chairman of the National Conference of State Legislatures' federal health care task force, agrees. "I still think it's better to have state control," he says. He authored a bill that would create a state health exchange; the bill is delayed.

States must submit their plans by November to meet HHS deadlines for exchanges to go into effect in January 2014.

Many conservatives say that even if states create an exchange, the federal government will dictate how it is run, not the state.

New Hampshire's House passed a bill by Republican Rep. Andrew Manuse that would prohibit lawmakers from creating laws to enact exchanges. He said Cato and ALEC helped him draft his proposal. "Not setting up an exchange is the best way we can work toward making the law be amended or repealed," Manuse said.

Kelly Kennedy, USA TODAY