“I am not going to set up a state-based exchange that will create a tax burden of up to $50 million on the people of Alabama,” Bentley said in a short statement emailed to the press. “As governor, I cannot support adding such a tax burden onto our citizens.”
Alabama and the rest of the states have until Friday to decide whether they will create statewide exchanges to allow individual people to buy health insurance at rates normally available only to large employers. The exchanges are a key element of the Patient Protection and Affordable Care Act. The federal government will step in and create exchanges for states that haven’t adopted them by Friday.
Bentley has been a vocal critic of the most of the provisions of the Affordable Care Act. But he was for health insurance exchanges before he was against them.
“As Governor, I will always encourage the creation of state health insurance exchanges to foster competition and lower cost,” Bentley wrote in a campaign document released in December 2009.
After the health care law was passed, Bentley appointed a 15-member Health Insurance Exchange Commission to study ways to comply with the law. According to the commission’s November 2011 final report, commission members voted unanimously to recommend the creation of a state health exchange. At the time, Bentley praised the plan.
“As I have said many times, my vision for an Alabama health insurance exchange existed before any federal health care reform effort began,” Bentley said, according to a Nov. 29, 2011, press release.
Asked why the governor changed his mind, Bentley spokeswoman Jennifer Ardis said the governor was concerned about the “massive cost” of setting up the exchange, which she said would run as high as $50 million per year.
“Those costs would include maintenance of the exchange and all that it entails — from customer service centers, to agents, efforts to determine eligibility and more,” Ardis wrote in an email to The Star.
Ardis said the governor also objected to a mandate in the law that determined the minimum essential benefits made available through an exchange.
According to the Associated Press, Bentley told a crowd in Birmingham Tuesday that he expects at least half the states to make the same decision in an effort to block implementation of the law and force Congress to make changes in “the worst piece of legislation ever passed in my lifetime.”
“If we stand together, I do believe Congress is going to have to look at this again,” Bentley said, according to AP.
Two legislators who headed the Health Insurance Exchange Commission, co-chairs Rep. Jim McClendon, R- Springville, and Sen. Greg Reed, R-Jasper, both said they supported the governor’s decision.
“I think he’s doing the right thing,” said McClendon. “We’re dealing with too many unknowns.”
Both McClendon and Reed said the federal health care law was too vague, and left too many open questions about which duties fell to the state and which duties belonged to the federal government.
“If you don’t know exactly what to do, you’re better off not doing anything,” Reed said.
Despite the report of a unanimous vote in the commission’s final report, both Reed and McClendon said the commission didn’t really recommend the creation of a state health care exchange. Both said the purpose of the commission was to plan how the health care law could be implemented, not to choose between a federal and state exchange.
“We weren’t in a position to turn around to the governor and tell him whether or not to do it,” McClendon said.
Commission member Rosemary Elebash said the $50 million price tag for the health exchange was a “ballpark figure” that came from a consultant hired by the commission.
Asked whether that $50 million cost would now fall to the federal government, Elebash said it would still come at taxpayers’ expense.
“The federal government is the people who pay taxes, so you’re going to pay one way or another,” she said.
Even so, getting the cost off the state budget could have its advantages for Bentley, given that the state is just emerging its own version of the fiscal cliff. The state’s General Fund budget for 2013 was facing a shortfall of more than $100 million before voters in September approved an amendment to take $437 million from a state oil and gas trust fund to shore up the budget for the next three years.
McClendon said that even after the Friday deadline, the law will allow the state to set up a health insurance exchange if it wants to.
But he doesn’t expect that to happen anytime soon. McClendon noted that voters on Nov. 6 approved a statewide amendment designed to block the Affordable Care Act’s mandate that people buy health insurance.
In the wake of the U.S. Supreme Court’s ruling in favor of the mandate, the Alabama amendment is likely to have little effect. But McClendon sees it as a sign that the Affordable Care Act lacks popular support.
“We can set up our own exchange later, if we want to,” he said. “But I doubt that will happen in the near future.”
The Associated Press contributed to this report.
Capitol and statewide reporter Tim Lockette: 256-294-4193. On Twitter: @TLockette_Star.