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Wisconsin Weighs Health Insurance Exchange Development

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Wisconsin has been in the political eye of late as a microcosm of changing politics across America but now the focus is on Wisconsin again related to health care reform and health exchange development.

After the recent Wisconsin recall elections and the debate on state employee collective bargaining, the focus shifts to whether Wisconsin will or won't develop its health insurance exchange. This too could get dicey.

Wisconsin is shaping up as a crucial test of how much Republican cooperation the Obama administration will get in implementing the Affordable Care Act, and particulary the health insurance exchanges.

Health insurance exchanges, the new insurance marketplaces that the Patient Protection and Affordable Care Act requires every state to have in 2014 (think of it as a Travelocity for health insurance). If states don’t have the exchange’s framework in place by 2013, Health and Human Services will come in and do the job.

Wisconsin Governor Scott Walker (R) has said that federal development of the exchange on behalf of Wisconsin would be the worst-case scenario. And looking to fend off that federal intrusion, many Republican governors have accepted at least some money to plan for an exchange. A handful have even signed laws to move the implementation process forward.

In February, the Obama administration released $241 million to seven states they deemed “Early Innovators” to develop prototypes for others to follow. More than half of the money went to three Republican governors: Oklahoma’s Mary Fallin, Kansas’ Sam Brownback and Wisconsin’s Scott Walker.

Some of those governor's have returned the federal money. "And that brings us back to Wisconsin. As of this week, it’s the only Republican-run state in the program," according to Sarah Kliff, blogger for the Washington Post.

While Kansas and other states have said no to the health exchange development funds, Wisconsin has accepted and is still non-committable. After coming into office in January Walker renamed the state's Office of Health Care Reform, established under former Gov. Jim Doyle (D) to the Office of Free Market Health Care.

But what will Walker do now as more implementation deadlines loom? By January 1, 2013 states need to tell the feds whether they are on target for the health insurance exchange implementation date of January 1, 2014. What will Walker do? Kliff says that for Walker, this feature of the Affordable Care Act has stood apart from the rest. “[The exchange money] is one of the few pots of Affordable Care Act funds that Walker has kept,” says Robert Kraig, executive director of Citizen Action of Wisconsin and a leading liberal activist on health care.

While this debate rages on within Wisconsin, the state has moved forward with its health health insurance exchange development. The linked website serves as a prototype for the Wisconsin Health Insurance Exchange and demonstrates how health insurance may be purchased starting on January 1, 2014, according to a statement on the website. Looking at the website it seems highly unlikely the satate will let the amount of work necessary to get to this point, go to waste.

The Wisconin prototype includes several individual and small business consumer scenariosn that provide an excellent tool for seeing how the exchange will operate and assist consumers in purchasing health insurance. The process is well down the road so it seems at least somewhat unlikely that Walker will pull the plug. But in Wisconsin, stranger things have happened.

States rejecting health reform funds isn’t a good sign for the Obama administration. As the threat of federal intrusion becomes increasingly imminent, states that decided to forgo some funds may ultimately build the marketplace anyway.

The states do not, however, have much time. Most states will need to pass legislation creating authority to set up the marketplace; so far, only 15 have done so. Similar bills have failed in 17 states.

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