Mo. delays work on health insurance exchange

JEFFERSON CITY, Mo. (AP) -- After several Republican senators raised concerns, Missouri insurance officials backed off plans Thursday to start spending millions of federal dollars on the computer technology needed to implement part of the new federal health care law backed by President Barack Obama.

Missouri was awarded a $21 million federal grant last month to prepare for a state-run "health insurance exchange," which would allow people to shop for insurance policies through an online marketplace. Under the new federal health care law, states have until 2014 to either set up their own insurance exchanges or have their online marketplace run for them by the federal government.

Missouri has not officially decided which course to take. A bill authorizing a state-run exchange passed the House in bipartisan fashion earlier this year but died in the Senate because of opposition from some Republican senators who don't like Obama's health care law.

A state board had been scheduled Thursday to formally accept the federal grant money, establish a Show-Me Health Insurance Exchange unit, designate a project manager and allocate $13.7 million for consultants to work on the technical aspects of the insurance exchange. But the governing board for the Missouri Health Insurance Pool called off the votes after several Republican senators complained that Democratic Gov. Jay Nixon's administration appeared set to implement the health-insurance exchange without legislative approval.

"We will continue to work with the Legislature to weigh the pros and cons of establishing a state exchange or defaulting to the federal government," said state insurance director John Huff, who has served as Nixon's project director for the potential insurance exchange.

Huff did not say when, or whether, the issue will be brought back to the board for a vote. But he said setting up the necessary technology is a long and complicated process that would need to start as soon as possible if Missouri is to begin taking applications for a health insurance exchange in the second half of 2013 and have the system ready by 2014. Missouri can spend the federal grant to begin developing a health insurance exchange, then halt the project later without having to return the money to the federal government, Huff added.

Some senators would prefer that Missouri not spend the federal money and instead simply wait to see if the federal government follows through on the law to set up its own system. They note that the federal law already faces a court challenge and that the 2012 presidential election will occur before the implementation date for the health-insurance exchanges.

Tensions rose among senators earlier Thursday during a meeting of a special Senate committee set up to gather public testimony on whether to implement a state-run, health-insurance exchange. Noting the agenda for the Health Insurance Pool board meeting later in the day, Sen. Rob Schaaf, R-St. Joseph, announced that it appeared Nixon's administration was attempting to sidestep the Legislature and implement the insurance exchange itself. That upset other senators.

"The constitution is out the window, the republic is dissolved and we're just going to have dictatorship by fiat that they're going to do this," declared Sen. Luann Ridgeway, R-Smithville, suggesting that people get up, march over to the other board meeting and demand they not proceed with the vote.

Later in the day, Schaaf and St. Louis-area Sens. Jane Cunningham and Jim Lembke met with Huff and the chairman of the Health Insurance Pool board to ask them to delay the vote, which they agreed to do.

"The three of us very forcefully explained that we do not believe that the Legislature is of a mind to create the exchange," Schaaf said.

Cunningham said that establishing a state-run insurance exchange subject to the provisions in the federal health care law would violate the spirit of a measure approved in August 2010 by Missouri voters. That law, for which Cunningham was the lead advocate, attempts to rebuff a central component of the federal law requiring most Americans to have health insurance by 2014 or face tax penalties.

If Missouri insurance officials start spending the $21 million federal grant, "you are setting up a war between the (Nixon) administration and the Legislature," Cunningham said.

Public passion also ran high during the Senate committee hearing. James Coyne, an insurance broker from Columbia, delivered what he said were 400 letters opposed to a state-run health insurance exchange. He described the $21 million grant as a bribe to comply with federal control of the health care system.

But Deanna Noriega, 63, of Fulton, said she has had difficulty throughout her life getting health insurance because she is blind. She expressed hope that a health insurance exchange would help make insurance more available and affordable.