Iowa will continue to work on a state-based health insurance exchange to comply with the federal health care law, but Gov. Terry Branstad on Friday left open the possibility that the state may default to a federal program.
The Republican governor sent a letter to U.S. Health and Human Services Secretary Kathleen Sebelius saying the state still doesn't have the information needed to decide which approach is the most cost-effective for Iowa.
U.S. Health and Human Services had set a Friday deadline for states to declare whether they will build their own marketplaces where consumers and small businesses can shop for health insurance. On Thursday, the agency extended the deadline to Dec. 14 - the same date by which states must submit detailed blueprints for how they will run their exchanges.
"I cannot provide you with a set of timelines or complete details about the exchange until our state receives clear, binding rules from your department," Branstad stated in the letter. "Forcing an exchange decision on states based on an arbitrary timetable would be like forcing a consumer to buy a car without knowing the vehicle's price tag or fuel economy. If forced to make a decision with incomplete information, then I have no choice but to default on some level to a federal exchange."s
Branstad spokesman Tim Albrecht said the governor wants to avoid a federally run exchange, but unanswered questions about the cost of a state exchange may leave him no choice but to accept "a one-size-fits-all exchange that throws us in with other states.
"We are seeking to avoid that," Albrecht said. "... But if they continue to stonewall us, we will have no choice but to default. We're hoping the feds will work with us to prevent that."
Albrecht said the federal government extended the deadline because it lacks the capacity to administer the health care exchanges in a large number of states.
The new insurance system is designed to create a marketplace where consumers and small businesses can make side-by-side comparisons when buying health insurance. Supporters of the law say that transparency will ultimately push costs down, while many Republicans have criticized it as an undue intrusion into the private marketplace.
Branstad sent Sebelius 50 questions that he said the federal government has yet to answer. The list includes questions about how the state exchanges would work with the Medicaid program, whether states can switch from a federal exchange to a state or partnership program, and whether the federal government will charge states that want to access federal databases needed to operate their own exchange.
Branstad said he also was concerned that congressional leaders who opposed the law would defund the program, putting Iowa in jeopardy of having a state-run exchange without federal aid that has been promised to help states move forward. And if Iowa decides to move from a state-run exchange to a federal program, Branstad said he was worried that the federal government would try to "claw back" the grant money that states receive to build their own programs.
Iowa Senate Democrats have pushed for a state-run health exchange as the best way to maintain local control. On Friday, Sen. Jack Hatch of Des Moines accused Branstad of playing politics with the health care requirements. He pointed to 17 other states that have already decided to move forward with state-run exchanges.
"Iowans of both parties simply want Gov. Branstad to work with the Obama administration to make buying private insurance easier and help uninsured Iowans," Hatch said.
Earlier this week, a U.S. Health and Human Services spokesman said the agency will provide "significant flexibility" to states as they decide how to proceed.