Maine hits GOP roadblock in setting up health insurance exchange

Posted March 15, 2012, at 6 p.m.

AUGUSTA, Maine — Republicans followed through Thursday on their pledge to put a state health insurance exchange on ice despite looming federal mandates.

States are required to set up the exchanges by 2014 under President Barack Obama’s landmark health reform law. But the Republican majority on the legislative committee tasked with establishing Maine’s exchange hopes the U.S. Supreme Court will strike down the law on constitutional grounds this summer.

A Democratic bill, LD 1498, that would have set up Maine’s exchange failed Thursday in the Legislature’s Insurance and Financial Services Committee in a party line vote.

Republican Rep. Jonathan McKane of Newcastle said he won’t be “complicit” in the federal Affordable Care Act’s implementation.

“I personally don’t believe in the Affordable Care Act,” he said. “I don’t see how adding more bureaucracy to an already overburdened system of bureaucracy now is going to help things. What I do know is that the costs, although very, very high already, we’re still not sure of.”

Twenty-six states, including Maine, are challenging as unconstitutional the ACA’s requirement that nearly all Americans purchase health insurance by 2014 or pay a penalty. The U.S. Supreme Court will take up the case in less than two weeks, with a ruling expected in June.

That will leave Maine about six months to get its exchange in order. States have until Jan. 1, 2013, to create exchanges that are up to federal snuff.

The exchanges are designed to make health insurance more affordable by serving as marketplaces for businesses and consumers to shop for health plans.

The committee voted 7-6 in favor of a bill sponsored by McKane that he described as a “defensive move” against the federal health reform law. The legislation, LD 1497, was amended to stipulate that in the event the ACA survives the court challenge, only licensed insurance brokers can enroll people in health plans through a state exchange.

Thursday’s votes culminate more than a year of disagreement in the committee about the state health insurance exchange. Both bills face final votes by the full Legislature.

States that fail to set up their own exchanges will have to hand the reins over to the federal government.

Republicans said previously that they’d sketch out a “bare bones” exchange to avoid the feds stepping in to run Maine’s exchange. But the amended bill they backed Thursday stripped out language about even a basic health insurance exchange.

Rep. Sharon Treat of Hallowell, sponsor of the Democratic exchange bill and the lead House Democrat on the committee, said Republicans’ denial about the ACA’s survival doesn’t serve constituents and amounts to election-year politics.

“I just don’t think closing our eyes and hoping the whole thing goes away is really a responsible solution to what is a huge issue in this state and all over this country, which is thousands of people who do not have health insurance, who do not have access to care,” she said.

Democrats pointed out that with an exchange, a family of four in Maine earning the median income of $46,000 a year could get a tax credit of up to $10,000, which would cover nearly 80 percent of their health care costs for the year.

Thirteen states, including Vermont and Massachusetts, and the District of Columbia already have set up their exchanges, while nine others have yet to begin the process, according to the Kaiser Family Foundation. Most fall somewhere in between and are still studying their options.

Maine won $6 million from the federal government in November to begin designing its exchange. That money will remain in a federal account until Maine asks for the funds, according to state officials.

Maine was also part of a five-state consortium awarded $36 million for early innovations in the exchange process and won a $1 million planning grant in 2010, the only grant so far that has been spent.

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