Monday, June 4, 2012

New Jersey Governor Vetoes Health Insurance Exchange

Last week, New Jersey Governor, Chris Christie, a Republican, became the second governor to veto a state law that would have created a health insurance exchange in the state. States are required under the Patient Protection and Affordable Care Act (ACA) to create such exchanges as online marketplaces for residents and small businesses to buy health insurance. 

Christie joins the governor of New Mexico in vetoing such a bill. Four other states have notified the Department of Health and Human Services that they will not create such exchanges.

Christie noted that the Supreme Court is currently considering the constitutionality of the ACA, and explained that he vetoed the bill because the exchange was “premature” and could impose “unnecessary obligations upon the state’s citizens.”  
Ultimately, the practical effect of Christie’s veto is limited. Under the ACA states that do not make progress toward establishing an exchange by January 2013 invite action by the federal government. States without health care exchanges will have to pay to set up an exchange, but the federal government will take over the administrative operations. On the other hand, regardless of the outcome of the Supreme Court’s decision, some states may wait to take action on exchanges until the outcome of the Presidential election in November. If the Republicans gain control of both the presidency and Congress, the Act may be repealed or this requirement may be significantly altered.

Not all states are taking this tack on the issue of exchanges. Governors of 11 states and District of Columbia have approved legislation to establish exchanges in their states. New York Governor Andrew Cuomo established an exchange by executive order and the Governor of Kentucky announced that he would do the same if the Court upholds the ACA.  Two states, Massachusetts and Utah, currently have operational exchanges.


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