COLUMBUS -- Gov. John Kasich officially deferred to the federal government Friday to run an insurance exchange mandated under President Barack Obama's landmark health-care law.
Kasich informed the U.S. Department of Health and Human Services of the decision in a two-page letter that noted, "At this point, based on the information we have, states do not have any flexibility to build and manage exchanges in ways that respond to unique needs of their citizens or markets. Regardless of who runs the exchange, the end product is the same."
Among other requirements, the federal Affordable Care Act calls for the creation of the exchanges, through which eligible residents could purchase subsidized health coverage. The federal government describes the exchanges as a "mechanism for organizing the health insurance marketplace to help consumers and small businesses shop for coverage in a way that permits easy comparison of available plan options based on price, benefits and services and quality."
States can form and manage their own exchanges or rely on a federal system.
Kasich is opting for the latter, though in his letter to federal officials, he wrote that Ohio would continue to regulate insurance markets in the state and determine Medicaid and Children's Health Insurance Plan eligibility.
The administration cited the cost of operating an exchange (an estimated $63 million to set it up and $43 million to run it) and a lack of information from the federal government among reasons for the move.
The announcement brought cheers from conservative groups and jeers from liberal ones.
"We are pleased that the Kasich administration heeded the clear effect of the Health Care Freedom Amendment (passed in 2011), which prohibited Ohio from enacting a state-based Obamacare exchange," Maurice Thompson, executive director of the 1851 Center, said in a released statement. "We can now turn our attention away from the Kasich administration, and begin to prepare litigation that ensures that Ohio employers will not be subjected to the $3,000 per employee fine, and that Obamacare ultimately collapses under the weight of its own legal infirmities."
Matt Borges, executive director of the Ohio Republican Party, added in a released statement, "The Obamacare plan to let us run our own exchange is a Trojan horse that will require Ohio taxpayers to pay more money for a program many will never see or use."
But Ohio Consumers for Health Coverage said there is bipartisan support for a state-run exchange. Col Owens and Cathy Levine, who head the group, said in a joint statement, "... We need a public process to evaluate the advantages and disadvantages, and the opportunities and challenges of each option. We are willing to work with the administration and other stakeholders on creating a state-based exchange that works for consumers and small businesses. ... Regardless of who is responsible for consumer assistance and outreach, there needs to be an open and inclusive planning process -- a process that needs to start now."
Ohio Democratic Party Chairman Chris Redfern said the decision was "another sign [Kasich is] unwilling to work with leaders across the aisle to move Ohio forward. The governor had over two years to seek clarity on how to set up a state exchange while over 20 other states made progress. Instead Kasich dragged his feet and politicized the process, giving a million dollar grant back to DC and refusing to apply for hundreds of millions more that could have helped with an exchange."
Marc Kovac is the Dix Capital Bureau Chief. Email him at email@example.com or on Twitter at OhioCapitalBlog.