Tennessee and the State Health Insurance Exchange

Health

Health (Photo credit: 401(K) 2012)

The state of Tennessee is in the news regarding the possible formation of a State Health Insurance Exchange, as outlined by  The Patient Protection and Affordable Care Act (PPACA).

Earlier this month, Tennessee Governor Bill Haslam, said that the lack of information coming from the White House on questions raised by him and his fellow Republican Governors, has delayed his decision for Tennessee.

Halsam’s questions include:

  • Will family members participating in different plans will be covered by the same provider?
  • Will the state be able to avoid being double-charged when seniors transition to Medicare?
  • Will the state will be able to access health care information stored in the federal database?
  • Will states be able to create wellness-based incentives to encourage healthy behavior?

These and other questions raised by Governors have been rebuffed by the White House which has stated that there is no need for them to answer the questions raised by the Governors.  The only response to the Governors from the Obama Administration has come from Health and Human Services (HHS) Secretary Kathleen Sebelius who put out a letter extending the state exchange decision deadline until December 14, 2012. According to Sebelius, additional guidance would be released soon.  She went on to say, “Our team will do everything possible to answer questions and provide technical assistance to state leaders.”

Following the money trail, it appears that Tennessee has intended for a while now to implement a State Health Insurance Exchange.  Tennessee has already accepted more than $9 million in Federal Government grants toward the implementation of a State Health Insurance Exchange the majority of which was applied for and received by Haslam.

• September 30, 2010 – $1,000,000 (State Planning Grant under former Governor Bredesen)

• November 29, 2011 – $1,560,220 (Establishment Grant Level One under Haslam)

• February 22, 2012 – $2,249,945 (Establishment Grant Level One under Haslam)

• May 16, 2012 – $4,300,000 (Establishment Grant Level One under Haslam)

The elephant in the room that no one seems to want to discuss is the matter of PPACA exchanges being illegal in Tennessee.

“It is declared that the public policy of this state, consistent with our constitutionally-recognized and inalienable right of liberty, is that every person within this state has the right to purchase health insurance or to refuse to purchase health insurance, unless purchase of health insurance is otherwise a condition of employment. The government may not interfere with a citizen’s right to purchase health insurance or with a citizen’s right to refuse to purchase health insurance. The government may not enact a law that would restrict these rights or that would impose a form of punishment for exercising either of these rights. “No public official, employee, or agent of this state or any of its political subdivisions shall act to impose, collect, enforce, or effectuate any penalty in this state that violates the public policy set forth in this section.” – Tenn. Code Ann. § 56-7-1016

An important note to the Tennessee Health Freedom Act, is that,  the legislation was signed into law In March 2011,  by none other than Governor Haslam.

There is another problematic issue with the entire issue surrounding PPACA and the State Health Insurance Exchanges.  According to the law as written, PPACA can’t coerce anyone to participate in PPACA, however a State Health Insurance Exchange can.

“No individual, company, business, nonprofit entity, or health insurance issuer offering group or individual health insurance coverage shall be required to participate in any Federal health insurance program created under this Act … or in any Federal health insurance program expanded by this Act … and there shall be no penalty or fine imposed upon any such issuer for choosing not to participate in such programs.” – PPACA 42 U.S.C. § 18115.

It appears that the federal government is relying upon the states  and their exchanges to be the enforcement tool in the overall PPACA implementation.  If enough states, currently 20, stand up to the take over of health insurance by the Federal Government, there appears that there will be an opportunity for real health care reform.

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