Ohio's Kasich Opts for a Health Insurance Exchange

Ohio's John Kasich has joined a short list of Republican governors who oppose the national health law but have decided to follow through on one of its key components — creation of a health insurance exchange where small businesses can compare policies. 

The Affordable Care Act requires all states to set up a health insurance exchange by 2014, or the federal government will do it for them. "It is important for people to be able to have a way to shop and find out what's available," Kasich said last week, according to The Columbus Dispatch . "But we also don't want a bunch of people in Washington who can't seem to get out of their way come in here and try to run Ohio."

The federal law gave states $1 million planning grants to get started on their exchanges; the grants went to every state except Alaska and Louisiana , where Republican governors refused it. To get more federal dollars, states have to enact a law or executive order creating the legal authority for an exchange.

Like Republican governors in other states, Kasich is in a political bind. If he refuses to authorize an exchange that could help small businesses lower their insurance bills, the state misses out on generous grants and risks having the federal government step in. On the other hand, if he approves of the exchange, he angers Tea Party activists who are trying to scuttle the national law.

Kasich's lieutenant governor, Mary Taylor, who is also the state insurance commissioner, has previously said she opposes the national health law and its state requirements. But asked by Stateline how she intends to proceed on the exchange, Taylor said: "We are examining every opportunity to minimize the damage that this federal law will cause while simultaneously promoting consumer-driven, market-based health care that will benefit all Ohio consumers and businesses. To that end, we are carefully reviewing all federal grant opportunities around Obamacare."

So far, only 10 states have enacted exchange legislation — all signed by Democratic governors, except in Nevada. In some Republican-led states, governors have seized the initiative away from legislators. Indiana's Mitch Daniels, issued an executive order authorizing an exchange. Georgia 's Nathan Deal and Alabama's Robert Bentley set up exchange study groups. GOP governors in Virginia and North Dakota signed laws establishing their intention to run an exchange. 

States that enacted fully compliant exchange legislation include California, Connecticut, Colorado, Hawaii, Maryland, Nevada, Oregon, Vermont, Washington State and West Virginia . In all, legislative attempts to create exchanges were defeated in 11 states, including New Mexico , where Republican Governor Susana Martinez vetoed a bill the Democratic legislature had passed.

Experts are concerned states aren't moving quickly enough to develop exchanges, given the health law's timeline. June 30, 2012, is the deadline for apply for federal funding. Inspections to determine whether states have made enough progress are slated for January 1, 2013.  Exchanges must be ready to accept applications for health insurance October 1, 2013, so that policies can be in force by January 1, 2014.