Florida has announced its decision to forego creation of a federally mandated health insurance exchange under the PPACA, in contrast to more than two dozen states who so far have undertaken the health exchange development process.
Flordia had previously qualified for a $1-million federal grant to plan for an exchange, but Gov. Rick Scott has declined to use the money.
Another state, Minnesota has in a similar way to Florida, decided to forego health insurance exchange development. Now former Governor Tim Pawlenty, signed Executive Order 10-12 in August 2010 that prohibited all executive department and state agency participation in federal health reform unless required by law or directed by the governor’s office.
Background
In 2009, about 50 million Americans lacked health insurance. Most worked low-wage jobs or for small companies that don't provide private insurance, according to the Kaiser Family Foundation study. These individuals are exactly the population that will be targeted by the developing exchanges.
The 2010 Patient Protection and Affordable Care Act sets a Jan. 1, 2014 implementation date for states to start enrolling their uninsured citizens in health exchanges, where individuals and small businesses can compare costs of private health plans, get questions answered and, ultimately, buy health insurance.
Prior to that, by Jan. 1, 2013, states have to inform the federal government of their decision on whether to implement its own exchange or allow the federal government to do it for them. At the same time, the states must prove to federal health officials that they are on a path to be ready for health insurance exchange implementation by January 2013.
The exchanges are intended to create a central "marketplace" that will let people compare coverage and make health insurance for individuals and small businesses more affordable.
The exact shape of that federal exchange remains unclear, Keith Maley , a spokesman for the U.S. Department of Health and Human Services told Insurance News Net.
Health Insurance Mandate Court Decisions
In January 2011 , a federal judge in Pensacola ruled that requiring people to buy private health insurance was unconstitutional and that the individual-mandate provision was so entwined in the health-care legislation that the entire law had to be invalidated.
However, other federal courts have reached different conclusions, and Judge Roger Vinson allowed the law to stand while his ruling was appealed. Then in late June, another federal appeals court ruled that the health insurance purchase is fundamentally different. The court ruled that the decision not to buy health insurance shifts costs on to those that do purchase it and therefore a mandate has merit.
PPACA supporters say the Commerce Clause of the U.S. Constitution gives Congress the authority to regulate the health insurance market. The plaintiffs in the Thomas More case have argued that Congress has no authority to make them buy health coverage.
Governor Scott, the former CEO of the Columbia/HCA hospital chain, has said he doesn't want to spend state or federal funds on a plan that may be unconstitutional.
The exchange planning grant is among millions in federal funding Scott and state legislators have turned down because of their opposition to the Affordable Care Act.
So far, 22 states have either created insurance exchanges or put the pieces in place, a recent Kaiser Family Foundation study found. Two states, Utah and Massachusetts, already have exchanges.
Collectively, those states have tapped $326 million in federal grants to set up the exchanges.
The list of states that have already created exchanges covers the political spectrum -- from Alabama to California. Exchanges have been set up as stand-along nonprofits, state-run agencies or quasigovernmental agencies with politically appointed boards.
States that don't have exchanges include 15 -- Alaska, Minnesota and Rhode Island among them -- where legislation failed or was vetoed. Another 10, including Florida, have taken no action at all.
