Ohio Delays Obamacare Exchange Implementation Pending Supreme Court Case

Published June 14, 2012

The Ohio Department of Insurance has delayed creating the health insurance exchange mandated by President Obama’s health care law for so long, compliance is now likely impossible.

Obama’s law requires the creation of state health insurance exchanges, which the federal government will attempt to implement in states that have not complied by January 2014. The timeframe required to create this exchange, according to estimates commissioned from consultants, is now more than double the time remaining for Ohio to create one.

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 the minimum requirements of Obama’s law, noting “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.

Strong Opposition From Voters

Ohio voters have made clear how they feel about the president’s law. In November 2011, more than 65 percent of 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.

By the end of 2011, supporters of Obama’s law were voicing concerns because 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.”

Lieutenant Governor Opposes

ODI Director Mary Taylor, who also serves as Ohio’s Lieutenant Governor, has remained a vocal critic of the law 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.

Waiting for Court Decision

But Taylor says the state has no plans to move forward before the Supreme Court decision, and perhaps not before the November election.

“[Gov. John Kasich] and I support repealing Obamacare in order to give states the flexibility they need to pursue state-based solutions that are best suited for their unique needs. Our analysis shows that Obamacare will be very disruptive to Ohio’s market, forcing premiums to rise while also placing more financial burden on taxpayers,” Taylor said.

She maintains the state will wait to see further outcomes before deciding how to proceed.

“Ohio has not yet decided on a course of action for exchanges because of tremendous uncertainty coming from the federal government as well as the pending Supreme Court decision expected early this summer,” Taylor said. “In the meantime, we will continue to focus on state reforms that improve access to affordable, high-quality care.”

Jason Hart ([email protected]) writes for Media Trackers Ohio.