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Governor Parnell plays politics on state health exchange decision

Posted: July 29, 2012 - 12:05am

At one time, Gov. Sean Parnell said he would take “weeks or months” to decide on whether or not to follow the lead of some prominent fellow Republican governors in rejecting certain provisions of the Affordable Health Care Act. But last week his decision to let the federal government create a health exchange for Alaska’s growing number of uninsured clearly indicates that Parnell has decided that playing politics is more important than tailoring a health insurance exchange for Alaska’s unique remote conditions. Parnell now joins Rick Perry of Texas, Rick Scott of Florida, Bobby Jindal of Louisiana and Nikki Haley of South Carolina in rejecting the option to create a state health insurance exchange.

But first, what is a health insurance exchange? Setting up an exchange is an attempt to inject some retail competition into places being served by a limited number of health providers. Theoretically, they’d allow individuals and small businesses to band together and get better prices and more variety in health insurance options — the kinds of breaks that big corporations can negotiate for their employees today.

I understand this was originally a Republican idea to use components of the marketplace to create more competition to drive down insurance costs. President Obama not only accepted but promoted the concept of a health insurance exchange as a key component of his health reform initiative. Obama stated that it should be “...a market where Americans can one-stop shop for a health care plan, compare benefits and prices, and choose the plan that’s best for them, in the same way that Members of Congress and their families can.”

The health care law, recently upheld by the Supreme Court, includes a provision that if the state chooses not to set up an exchange, the federal government will do so for the residents of that state. This is all part of bringing the millions of uninsured into a viable health care system. To entice the state to develop these exchanges the federal government provides planning grants and subsidizes the operation, ensuring that this is not an unfunded federal mandate.

Now back to Parnell’s action. As noted in the Juneau Empire (July 18), the governor is basing his decision to not pursue a state exchange on fiscal matters. In a press release announcing his action he says, “It doesn’t make sense to spend Alaskans’ dollars to set up an exchange when so much uncertainty exists about how to implement it and how to gain federal approval.” Sounds perfectly reasonable on face value, however it turns out the only reason why Alaskan dollars would be at all involved is because Parnell decided to be the only governor in the country to reject federal funds for planning a state health exchange. Even those Republican governors rejecting the state health exchange option accepted funds for planning.

If I’m tracking the governor’s fiscal message right, this means that Parnell is basing a critically important policy decision on “not having funds because I didn’t take them.” Huh? This is just as baffling as why a Governor who often rails about the intrusions of the federal government and sues them every chance he gets, would now prefer the federal government?

Next we learn that Parnell is choosing this peculiar path contrary to a department’s consultant report and staff recommendation. As noted in a report quoted in a Juneau Empire story (July 25), “State staff indicate a strong desire for the State of Alaska to find a State specific solution for exchange creation and a preference to not rely on federal solutions.” Does this suggest that even the state knows that it’s not in the state’s best interest to hand this off to the federal government?

The absurdity continues. Michael O. Leavitt, a former Governor of Utah and federal health secretary and now a top aide to Republican presidential candidate Mitt Romney, recently stated in a New York Times article that it would be better for the states to create their own exchanges for their respective markets or risk “an Obama-style federal exchange being foisted upon a state.” When someone of Mr. Leavitt’s stature says this publicly, this creates what politicians call ‘political cover’. In essence, former Gov. Leavitt, provided Parnell a way to be in step with his party and yet act for the state’s overall best interest.

If you’re not totally confused by all the inconsistencies, let me re-cap the scenario. Governor Parnell first rejects federal funds to plan for and create a state health insurance exchange. Then despite his dislike for the federal government, he hands the program back to the federal government, citing he did not want to spend Alaska dollars to figure this out. He does this despite the recommendation of his own staff — who by the way remain loyal in stating “what is relevant is the governor’s decision after considering all the factors.” He does this despite having the political cover to do otherwise.

Unfortunately, there is more to the story than just confused decision-making, there is the loss of Alaskans addressing the needs of our uninsured (estimated to grow to 77,000) and small businesses. This is a ridiculously high price to pay for stubborn ideology which as far as I can tell was the only factor the governor considered in his decision to reject a state run health exchange.

• Troll is a longtime Alaska resident and resides in Douglas.

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