By Angela Gonzales
Phoenix Business Journal
Gov. Jan Brewer notified the Obama administration Wednesday that Arizona will not pursue the creation of a state-based health insurance exchange.
Instead, Arizona will participate in a federally operated exchange.
“This has been one of the more difficult decisions of my career in public service,” Brewer said in a prepared statement. “My opposition to the Affordable Care Act (ACA) is unwavering, as is my belief that it should be repealed and replaced with legislation that achieves its stated goals: to improve access to quality, affordable health care in this country. But I am also aware that the ACA remains the law of the land. Likewise, though I am a steady advocate of local control, I have come to the conclusion that the State of Arizona would wield little actual authority over its ‘state’ exchange. The federal government would maintain oversight and control over virtually every aspect of our exchange, limiting our ability to meet the unique needs of Arizonans and the Arizona insurance market.”
Tom Jenney, Arizona director for Americans for Prosperity, said a federal exchange will protect employers because the Internal Revenue Service will have no authority to impose employer penalties under the federal exchange the way it would under a state exchange.
Brewer said a state exchange would be costly.
“Though the federal government has pledged to pay nearly all startup costs, states that form their own health exchanges are on the hook for operational expenses beginning in 2015,” Brewer said. “Those costs could total $27 million to $40 million annually for the State of Arizona, according to a recent study conducted by Mercer. Of course, these expenses would be passed along in the form of fees resulting in higher health premiums for Arizona families and small businesses. This would be an additional financial burden at a time when so many Arizonans are still struggling.”
Statement by David Weissman, director of the Rose Law Group Employment Law and Managed Health Care Law Practice:
“The governor’s decision not to move forward with the implementation of the Arizona insurance exchange comes as a bit of a surprise, given how much time and money has been spent developing the Arizona exchange up to this point. That said, Arizona is not the first state to opt out of running its own exchange, and isn’t likely to be the last. I suspect that this is just the beginning of the discussion on the extent to which individual states will choose not to participate in some of the key provisions of the Affordable Care Act, namely the insurance exchanges and the expansion of Medicaid.”
