Louisiana health agency officially rejects state-run insurance ...

In a letter that broadly criticized the federal health reform law, Louisiana?s health secretary officially declined Wednesday to move forward with a state-run exchange for consumers to buy insurance. The move means the U.S. Department of Health and Human Services will be tasked with getting the exchange up and running by the fall of next year.

The decision was not unexpected. Bruce Greenstein, secretary of Louisiana?s Department of Health and Hospitals, said in March 2011 that the state would defer to the federal government on this key part of the federal law. Gov. Bobby Jindal reiterated that point in an interview with the Huffington Post earlier this week.

The deadline for states to tell the federal agency of their official positions on establishing exchanges is Friday. Several states, including Alabama, Missouri and Kansas, announced earlier this week they won?t participate in this part of the federal law. Some states whose leaders have been mulling their options are expected to sign on, either operating an exchange on their own or in partnership with the feds.

As of Wednesday, the Kaiser Family Foundation counted 16 states that will move forward with exchanges, while 14 have given their final word they won?t. Another four states will operate exchanges in partnership with the federal government.

In the letter signed by Greenstein, the state called the Affordable Care Act ?bad policy,? saying it fails to foster real innovation.

The exchanges are new online marketplaces where individuals and small businesses can compare and purchase insurance policies. Families with incomes up to 400 percent of the federal poverty level ? or about $88,000 for a family of four -? will be eligible for subsidies to pay for coverage.

Greenstein said the exchanges as envisioned in the federal law are too regulated, likely raising costs and limiting choice. The concept is ?only masquerading as a free market idea,? he wrote to DHHS Secretary Kathleen Sebelius.

?Many employers will drop the health insurance coverage they currently provide to employees, leaving individual health care needs to the federal government,? Greenstein predicted in his letter.

While the U.S. Supreme Court largely upheld the federal health law this summer, Greenstein noted that other legal challenges are still pending in the lower courts. One lawsuit specifically questions whether federally-run exchanges, as opposed to those run by states, are authorized to provide premium subsidies.

Proponents of the exchanges hope they will foster competition in state insurance markets, which are often dominated by a small number of companies. They argue states that cede control of the exchanges to the federal government miss the opportunity to take advantage of the knowledge of local insurance regulators.

The Urban Institute estimated that as many as 317,000 individuals would participate in Louisiana?s exchange, with more than 209,000 of them qualifying for subsidies. A survey conducted for the state health agency found that the number of uninsured adults under age 64 grew 17 percent between 2009 and 2011 to 633,943 people.

In recent days, several commentators have underscored one concern raised by Greenstein: The very tight schedule that federal regulators will be on to get the exchanges up and running by October 2013. The exchanges need to be completed by then so people can use them to purchase insurance for early 2014.

Despite declining to participate in this part of the federal law, Greenstein concluded his letter with a list of demands that the federal agency keep the state abreast of its efforts, including regular briefings on their progress.?

Source: http://www.nola.com/health/index.ssf/2012/11/louisiana_health_agency_offici.html

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