Ohio Officials Delay State’s Obamacare Exchange

The Patient Protection and Affordable Care Act (ACA) — commonly known as “Obamacare” — requires state health insurance exchanges, which the federal government will attempt to implement in states that have not complied by January 2014. To the dismay of ACA supporters, the Ohio Department of Insurance (ODI)  has delayed creating Ohio’s exchange for so long that compliance is now likely impossible.

The Cleveland Plain Dealer reported on May 23, 2011 that ODI had launched a website to inform Ohioans about the state’s health insurance exchange work and to allow citizens to submit feedback. Using a $1 million U.S. Department of Health and Human Services (HHS) grant, ODI contracted with Milliman, an actuarial consulting firm, for a planning study, and with KPMG for technical gap analysis.

Milliman’s report estimated yearly non-IT operating costs of $19.2 million for an Ohio exchange meeting minimum ACA requirements, noting that “start-up costs may be substantially higher than one year of operating costs for running the Exchange.”

KPMG’s report identified “significant schedule risk,” recommending ODI apply for an HHS exchange establishment grant by September 30, 2011. KPMG estimated technical implementation could cost up to $63.4 million and take at least 50 months. With less than 20 months until the January 2014 deadline, ODI still has not applied for an exchange establishment grant.

In November 2011, voters approved the Ohio Healthcare Freedom Amendment — which blocks insurance coverage restrictions like those included in ACA and prevents Ohioans from being compelled to participate in a health care plan — 65.6 percent to 34.4 percent.

By the end of 2011, ACA supporters were voicing concerns that ODI had not applied for its exchange establishment grant from HHS. Maurice Thompson, author of the Healthcare Freedom Amendment and director of the 1851 Center for Constitutional Law, opined, “The Patient [Protection] and Affordable Care Act creates a lot of rules, and they may have to carry different parts of Obamacare into effect. State officials can’t do that in Ohio. The federal government would have to do it directly.”

ODI Director Mary Taylor, who also serves as Ohio’s Lieutenant Governor, has remained a vocal critic of ACA even as ODI researches the state’s health insurance exchange options. At a January 2012 event, Taylor warned that creating an exchange compliant with ACA would leave state officials “little control in the decisions that we need to make to do what’s best for Ohio and do what’s best for Ohio consumers.”

Attempting to circumvent Taylor and ODI, Ohio Democrats introduced legislation early in January 2012 to create an Ohio Health Benefit Exchange Agency for the purpose of implementing and overseeing an exchange. With Republican majorities in both houses of the General Assembly, the legislation is unlikely to leave the Insurance, Commerce, and Labor Committee.

At a February 29, 2012 event in Columbus where Taylor was also a speaker, HHS regional director Kenneth Munson pressured Ohio to create its exchange before the January 2014 deadline. “It’s the law, and time is short,” Munson said.

Taylor has said ODI is “waiting for more clarity from Washington” before proceeding, but at a May 14, 2012 event in New Philadelphia she told local business leaders, “The Affordable Care Act is bad for Ohio. It’s not the solution we need.”

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