Bill Haslam, Tennessee Governor, Rejects Obamacare Exchange

Tennessee Gov. Bill Haslam speaks at an economic development conference in Nashville, Tenn., on Friday, Oct. 19, 2012. The go
Tennessee Gov. Bill Haslam speaks at an economic development conference in Nashville, Tenn., on Friday, Oct. 19, 2012. The governor announced at the conference that Nissan Motor Co. is launching a third shift at its Smyrna plant, creating more than 800 jobs. (AP Photo/Erik Schelzig)

Tennessee won't help the federal government establish a vital component of President Barack Obama's health care reform law, Gov. Bill Haslam (R) said Monday.

Including Tennessee, 21 states have now officially declared that they won't create health insurance exchanges under the law. The exchanges will be online marketplaces that will serve as gateways for as many as 30 million uninsured people to obtain health coverage and financial assistance starting in 2014. States face a Friday deadline to inform federal officials whether they will run the exchanges on their own, leave the task to federal authorities, or partner with the U.S. Department of Health and Human Services.

"Tennessee will not run a state-based exchange. If conditions warrant in the future and it makes sense at a later date for Tennessee to run the exchange, we would consider that as an option at the appropriate time," Haslam said in a news release.

“I'm not a fan of the law," Haslam said. Despite his opposition to Obamacare, Haslam had entertained creating a state-run health insurance exchange as a way to exercise some control over the law before deciding against it, he said.

Haslam echoed complaints made by other governors that the federal government has been slow to provide information to states and to publish key regulations. Likewise, Haslam said Tennessee didn't have enough time.

“The Obama administration has set an aggressive timeline to implement exchanges, while there is still a lot of uncertainty about how the process will actually work. What has concerned me more and more is that they seem to be making this up as they go," Haslam said in the statement. Haslam also announced his decision at the Rotary Club of Nashville Monday, the Nashville Business Journal reported.

Also on Monday, the Associated Press reported that officials in West Virginia announced the state will partner with the federal government to run its exchange, after making preparations to manage a state-run exchange.

To date, 17 states and the District of Columbia have said they plan to operate their own exchanges, six are planning to partner with the federal government and six haven't made announcements, according to the Henry J. Kaiser Family Foundation. Exchanges are slated to be open for business on Oct. 1, 2013, for people to buy coverage for 2014.

Virginia Secretary of Health and Human Resources William Hazel said last Thursday that the state likely will not create an exchange, and Indiana Gov.-elect Mike Pence (R) indicated that he does not support establishing a state-run exchange. Neither state has formally notified the federal government of a decision.

The health care reform law permits the federal government to create and manage health insurance exchanges in states that don't build their own, but the law's authors intended for states to share the financial and regulatory burden. Poor coordination between a state and the federal agency operating an exchange could impede the ability of uninsured people to gain health coverage under the law. In addition, states that step aside cede control over key decisions about how Obamacare is implemented, such as what health insurance companies are allowed to sell plans in a state.

Around 30 million people are expected to gain private health insurance coverage or Medicaid benefits by 2022 under Obamacare, according the Congressional Budget Office. The exchanges will allow people to comparison-shop for health plans and to learn whether they are eligible for tax credits for private health insurance that will be available for anyone who doesn't get health benefits at work and earns between the federal poverty level, which is $11,170 this year, and four times that amount.

The health care reform law also calls for an expansion of Medicaid to anyone with an income up to 133 percent of poverty, which is $14,856 this year. But when the Supreme Court upheld the rest of the health care law in June, it allowed states to opt out of the expansion. So far, nine Republican governors have declared their states will not offer Medicaid to more poor residents, most recently Dennis Daugaard of South Dakota.