Texas refuses to launch health insurance exchange

July 15, 2011
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AFFORDABLE TEXAS HEALTH INSURANCE PLANS

Texas declined to create a health insurance exchange during the legislative session that ended June 30, but the state did advance its own version of accountable care organizations.

Gov. Rick Perry strongly opposes the health system reform law and threatened to veto any legislation that would help implement the law’s health insurance exchanges. The exchanges will serve as one-stop marketplaces for qualifying health coverage beginning in 2014. Perry did not want to be seen as aiding the implementation of the health reform law in any way, said Texas Rep. John Zerwas, MD, sponsor of the leading bill to create an exchange, and Texas Medical Assn. President Bruce Malone, MD, in separate interviews.

“They definitely were just very entrenched on this idea,” Dr. Zerwas said. At least one other governor, Bobby Jindal of Louisiana, opposes creating a locally controlled exchange in his state.

The Texas Medical Assn. supported Dr. Zerwas’ measure to authorize a state insurance exchange. However, Dr. Malone called the national reform law’s subsidies to help buy health insurance through the exchanges a “middle-class welfare entitlement.” The subsidies will be available on a sliding scale to people earning up to 400% of the federal poverty level, or $43,560 for an individual.

Perry opposed Dr. Zerwas’ bill even though inaction on the issue could force the Dept. of Health and Human Services to operate a federal exchange in Texas. HHS will do so in states that decline to create their own insurance exchanges.

Perry spokeswoman Lucy Nashed said the governor is hoping that the U.S. Supreme Court will uphold lower-court rulings that part or all of the health reform law is unconstitutional. “The governor is committed to working with lawmakers and state health and insurance officials to address Texas’ health care needs, and we are looking at all of our options to determine what’s in the best interest of Texans.”

Texas could enact its own exchange at a later date, HHS officials said during a July 11 call with reporters about new proposed rules to create health insurance exchanges. HHS in January 2013 will certify whether state-created health insurance exchanges are on track to operate by January 2014. After 2014, a state that did not create an exchange could still do so if the state provides 12 months’ notice, said Steve Larsen, director of the HHS Center for Consumer Information and Insurance Oversight.

Drs. Zerwas and Malone said Perry told them he can create a state insurance exchange administratively without consulting the Legislature. Nashed did not explain what legal authority Perry might have to do so.

Perry approved a measure passed by the Legislature to create “health care collaboratives,” Texas’ version of accountable care organizations. The bill clarified that health care organizations that assume financial risk for treating patient populations will be classified and regulated as health insurance. It also requires collaboratives to have physicians on their governing boards. Individual doctors will be able to participate in more than one collaborative.

However, many details about the collaboratives need to be spelled out, Dr. Malone said. Texas physicians are likely to be skeptical about collaboratives. “I can’t imagine a scenario in which doctors would be anxious to participate in this,” he said.

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2 Responses to Texas refuses to launch health insurance exchange

  1. Tucker on March 25, 2012 at 2:58 pm

    Texas is almost alone among the nation’s largest states in failing to start work on a key piece of the Affordable Care Act, as legislators and state agencies follow Gov. Rick Perry’s wish to delay action until after a Supreme Court ruling and the November election.

    “Politics superseded good policy,” state Rep. Garnet Coleman, D-Houston, said of the inaction on creating an exchange to help small businesses and individuals buy health insurance.
    Texas is one of nine states identified by the Kaiser Family Foundation — other than Florida, the others are mostly small, with relatively few uninsured residents — as having made “no significant progress” toward establishing an exchange. A Perry spokeswoman said there are no plans to change that.

    “(Perry) feels the health care bill is unconstitutional and misguided,” spokeswoman Lucy Nashed said. “There are no plans to implement an exchange.”

    But analysts say the delay makes it more likely that the state will miss a Jan. 1, 2013, deadline for proving a state exchange is on track. If it’s not, the federal government will impose its own exchange.

    State Rep. John Zerwas tried unsuccessfully to pass a bill last year that would have established an exchange in Texas, but it went nowhere as Perry expressed his opposition to it. If President Obama loses in November, or if SCOTUS throws out enough of the Affordable Care Act to cripple or kill it, then Perry will get his wish and will be able to continue blissfully ignoring the needs of the millions of Texans who lack health insurance. If not, he’ll have no one to blame but himself when the feds set up shop.

    There is another possibility. The federal exchange is subject to the same Republican nihilism as anything else, and some states that are making progress towards establishing their own exchanges have experienced bumps in the road. It would not shock me if that January 1, 2013, deadline gets pushed back in the face of facts on the ground, thus giving the Texas Lege a second chance to get something going. Whether they get clearance to take advantage of such a scenario or not is another story.

  2. acrx on May 25, 2012 at 10:43 am

    Thank you for the good writeup on Texas Health Insurance. It if truth be told was a entertainment account it. Look advanced to far delivered agreeable from you! By the way, how can we keep up a correspondence?