US rejects Miss. health insurance exchange plan

Health insurance exchanges are a centerpiece of President Barack Obama's Affordable Care Act, commonly known as "Obamacare." Lack of support for the exchange from Mississippi's governor led to the rejection.

JACKSON, Miss. — Mississippi on Friday became the first state to see its proposal for a health insurance exchange rejected by the government, and federal officials said Republican Gov. Phil Bryant's opposition to the plan was to blame.

"With a lack of support from your governor and no formal commitment to coordinate from other state agencies, we do not see a feasible pathway to conditionally approving a state-based exchange in Mississippi for 2014," the U.S. Department of Health and Human Services said in a letter to the state.

Mississippi Insurance Commissioner Mike Chaney, a Republican, had waged a bitter battle with Bryant and other fellow party leaders in his state over implementing a state-run health insurance exchange.

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The exchanges are a central provision of Democratic President Barack Obama's Patient Protection and Affordable Care Act. Under the law, all states must have fully operational health insurance exchanges by Jan. 1, 2014.

Bryant opposes a state-run system, saying it opens the door to the Affordable Care Act, commonly referred to by critics as "Obamacare." The governor has said it will shackle the state with debt related to inflated Medicaid rolls.

Chaney also opposes the federal health care reform law. But he has argued a state-run system would let Mississippi control its own insurance market, saving thousands of jobs and millions of dollars in the long run.

Chaney said he felt "betrayed" upon getting first word of the rejection on Thursday and blamed the decision on politics versus the merits of his proposal, according to local media.

After receiving the denial letter on Friday, the insurance commissioner said he would continue to work with the federal government to build a state-operated exchange independent of any federal program.

"This would be a free-market approach to solving some of the state's insurance problems faced by small businesses," Chaney said in a statement.

The commissioner has been working on the exchange for years and became a resource for other states trying to devise their own plans. Mississippi submitted its proposal to the federal government in November.

An exchange allows consumers to compare plans provided by health care providers in an effort to make them more transparent and get more people enrolled. If states fail to implement their own exchanges, the federal government will do it for them.

Seventeen states and the District of Columbia have received conditional approval to establish their own state exchanges.

States have the choice of rejecting the exchange provision outright, or following Delaware and Arkansas by participating in federal partnership exchanges that would allow them to manage insurance plans and aid consumers.

The deadline for states to declare their intentions to run federal partnership exchanges is Feb. 15. The Health and Human Services Department said on Friday that it considered Mississippi "an excellent candidate" for that model.

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