States Take Wide Variety of Approaches to Obamacare Exchange Mandate

Published September 14, 2011

Perhaps the biggest state challenge recently has been whether to set up a health insurance exchange as required by President Obama’s health care law. States are all over the map—both literally and figuratively.

Moving Forward


Arkansas Surgeon General Joe Thompson is urging the legislature to add consideration of a health insurance exchange to the 2012 fiscal legislative session, but it does not appear Gov. Mike Beebe (D) is sold on the prospect. The legislature rejected a proposed health insurance exchange earlier this year, and Beebe has indicated he will not apply for federal funding of the health insurance exchange unless the legislature authorizes the transaction.

Despite the political environment, a 21-member committee is working on development of an exchange in the state.


After authorizing the creation of a health insurance exchange, the state has now received a $6.7 million health insurance exchange grant from the Obama administration to plan it. Lt. Gov. Nancy Wyman (D) leads the committee working on creating the exchange.


The Georgia Health Insurance Exchange Advisory Committee appointed by Gov. Nathan Deal (R) recommended the state move forward on the development of an exchange. The committee will be recommending legislative action and has created a subcommittee to work on alternative plans in case part or all of the federal health care reform law is declared unconstitutional.


A panel is in the process of drafting legislation to create a health insurance exchange. It is an interesting turn of events given the state’s previous staunch opposition to ObamaCare—having even considered bills to “nullify” the federal law. The proposed health insurance exchange will include a nine-member board (seven appointed by the governor), offer standalone dental plans in addition to medical plans, and cover the individual and small group markets. The legislation would automatically close the exchange if the U.S. Supreme Court strikes down the Obamacare law.


Republican legislators are questioning the authority of Gov. Mark Dayton (D) to accept a $4.2 million federal grant funding the creation of a health insurance exchange. The Republican-controlled legislature has not authorized an exchange and is threatening to sue Dayton if he moves forward with it.

“With the awarding of this grant, the governor appears to continue to move forward on establishing a Minnesota health insurance exchange without consulting with the Minnesota State Legislature and stakeholders from the public,” said State Sen. David Hann, chairman of the Minnesota State Senate Health and Human Service Committee.

North Dakota

North Dakota Insurance Commissioner Adam Hamm met with some skepticism when he suggested to an interim legislative committee that North Dakota might be better off allowing the federal government to create the state’s health insurance exchange. While advocating the state keep individual and small group market pools separate, Hamm proposed letting the federal government incur all the risks and costs of creating the exchange mandated by the federal health care reform law. HHS officials have testified states could take control of a health insurance exchange at any point after the exchange is established, Hamm noted.

Opposition Effort

There are still numerous state efforts to stop the implementation of ObamaCare. Here are two examples.


The Ohio Supreme Court has rejected a court challenge to remove the proposed Health Care Freedom Act, a constitutional amendment aimed at blocking the federal health care reform law, from the Nov. 8 ballot.

In bringing the suit, PROGRESSOHIO had challenged the validity of the petition signatures submitted to the Ohio secretary of state’s office to put the proposal on the fall ballot.


Gov. Sam Brownback (R) decided to return the state’s $31.5 million “early innovator” exchange grant awarded by HHS in February for early implementation of the state-based exchange. “There is much uncertainty surrounding the ability of the federal government to meet its already budgeted future spending obligations,” said Brownback.

Mandate Nation

Despite years of warnings that health insurance mandates drive up health insurance costs, some states refuse to listen.


Gov. Pat Quinn (D) has signed several new health care laws, including HB 2249, a bill requiring insurers to cover the cost of diabetes educational efforts, and HB 3039, which requires insurers to annually provide information to their customers on the risks of cardiovascular disease.

Quinn also signed SB 1948, a bill to expand dental coverage in the state’s high risk pool program by creating “dental homes.” The scarcity of participating dental providers, caused by inadequate reimbursement rates, likely means the legislation has no teeth.

Preexisting Condition Insurance Plans

It is safe to say the Pre-Existing Condition Insurance Plans (PCIP), the federal high-risk pools included in ObamaCare, have not been a success. Nationwide enrollment in the plans is still lower than enrollment in Minnesota’s state high risk pool.

In June, the federally run high-risk pools had a “sale,” cutting premiums by as much as 40 percent, in order to boost enrollment. Now California, Connecticut, and Missouri have cut the rates in their state-run PCIPs. Enrollment in the California (3500 people), Missouri (600 people), and Connecticut (75 people) PCIPs is still far lower than the enrollment in the existing state-based high risk pools, which do not receive federal subsidies.