NC to build state-federal online insurance market

North Carolina and the federal government will jointly run a new one-stop shop to help people buy affordable health insurance, Gov. Beverly Perdue said Thursday.

Perdue, a Democrat, said she consulted with Republican Gov.-elect Pat McCrory and chose a state-federal partnership to operate the health insurance exchange required by the Affordable Care Act. North Carolina lawmakers failed to establish the framework for a state-run insurance exchange in time for the initial launching late next year, Perdue said, and the only other option was for the federal government to fully run it.

"There would be nothing worse for North Carolina than to have a federal exchange," she said in a news conference. "I don't see the federal government being in total control."

After President Barack Obama was re-elected last week, North Carolina was among dozens of states scrambling to produce a blueprint for a statewide marketplace of private health plans for individuals and small businesses having difficulty finding affordable coverage.

"Finally we've realized it is the law of the land given the federal election results," Perdue said. "There now will be concentrated energy on implementing sections of the act. We'll continue to have questions and concerns I'm sure."

Republican governors in Virginia and Alabama have indicated they'll allow the federal government to set up the market in their states rather than take a role in the next phase of the federal health care overhaul. Other states, such as Mississippi, have moved forward with plans to establish their own exchanges.

The state Department of Insurance has applied for $74 million in federal grant funds to help offset the costs of setting up the exchange, said Al Delia, secretary of the state Department of Health and Human Services. If the state had set up its own exchange, it would have cost more than $40 million, he said.

North Carolina lawmakers started work in 2011 on creating an exchange – the state House even passed legislation – but progress stalled as Republican leaders waited to see if the U.S. Supreme Court upheld the federal law. The high court cleared the law in June, days before lawmakers wrapped up their two-year session. Legislators did, however, express their intent to establish an exchange.

The hybrid system can be changed later to all-state or all-federal management.
 
"This decision allows him (McCrory) the opportunity to then, in his own good time, make a decision that will be permanent for the state," Perdue said. "So, in six or eight months or 30 days, if they decide they want a state option, they can work with the General Assembly to make that happen sooner than later."

McCrory issued a statement Thursday, saying Perdue's move gives the state needed flexibility and noting that he's still learning about health exchanges.

Republican legislative leaders and conservative groups blasted the governor, however, for taking the decision out of McCrory's hands.

"It is not necessary or appropriate for Gov. Perdue to prematurely declare her intent to establish a state-federal partnership exchange," Senate President Pro Tem Phil Berger said in a statement, noting that federal officials pushed the deadline for states to choose how to handle health exchanges back to Feb. 15, 2013.

"The voters elected a new legislature and governor last week, and policy decisions of this magnitude should be left to them," said Berger, R-Rockingham.

House Speaker Thom Tillis was more neutral on the issue, saying only that he looks forward to working with McCrory and other Republican officials to make the best decision for the state.

Americans for Prosperity said in a statement that North Carolina should refuse to set up an exchange, as other states have done.

"Gov. Perdue should not be making large-scale policy changes that she knows the legislature does not support while she is on her way out the door,” Dallas Woodhouse, state director for the conservative organization, said in a statement.

One goal of the Obama administration's health care overhaul is reducing the number of state residents under age 65 who were without health insurance in 2010. That number stood at 1.6 million, according to the latest estimate by the North Carolina Institute of Medicine.

The law also provides federal funds to cover most of the early costs of expanding Medicaid to cover more uninsured families. McCrory and the GOP-controlled legislature will have to decide whether to proceed and whether the state can afford its future share of the costs, Delia said.