While Perry Rejects Federal Reform, State Agency Quietly Presses On

Republican Gov. Rick Perry has made no secret of his disdain for federal health reform, or for one of its key tenets, a Travelocity-like state insurance marketplace in which consumers could choose from public and private health plans.

The threat of Perry’s veto pen even derailed legislation by one of his fellow Republican “anti-Obamacare” colleagues, who fears that if state lawmakers do not implement a health insurance exchange of their own, the federal government will do it for them — in his view an even worse fate.

But among Perry’s gubernatorial peers, his stance on the health insurance exchange appears to be losing popularity: Politico reported last week that Republican Govs. Haley Barbour of Mississippi, Mitch Daniels of Indiana and Scott Walker of Wisconsin — even as they continue to oppose the federal health care program overall — are taking steps to comply with that piece of the law.

Meanwhile, despite Perry’s stated opposition to a health insurance exchange, and the state’s participation in lawsuits aimed at overturning federal health reform, officials at Texas’ Department of Insurance acknowledge that since last fall, with the help of a $1 million grant from the U.S. Department of Health and Human Services, they have been working behind the scenes to plan for a health insurance exchange.

“We’ve been going full speed ahead on implementation, doing the due diligence so that we can be on time with what the law says,” said John Greeley, a spokesman for the agency.

Lucy Nashed, a spokeswoman for Perry, said the governor is aware of the grant, which she said is “exploratory” and does not require Texas to set up an exchange. While Perry prefers local solutions to Texas’ health care problems, Nashed said the governor remains hopeful the courts will overturn the federal health law.

“The governor’s firm belief that Texans should be in charge of our health care programs is unchanged,” she said.

If the courts uphold the health reform plan, states have until 2014 to get an insurance exchange off the ground before the federal government steps in. Rep. John Zerwas, R-Simonton, who filed the Texas health exchange bill that failed in the just-ended session, said that if the federal government threatens to install a one-size-fits-all program in Texas, “we could, in fact, pull something off in really short order.”

Still, he said, given the antipathy between some Texas officials and the Obama administration, he worries about delays in setting up an exchange.

“I would have some concerns that they would say, ‘You all didn’t bother to make significant efforts with the lead time you had,’” Zerwas said. “I wouldn’t put it past them not to certify what we came up with in a last-minute effort.” 

In the end, it may not be so last minute. The state’s insurance department is using the $1 million federal grant to hire a consultant to consider options for both a state-run and federally run health insurance exchange. Greeley said department officials initially believed a change in state law would be required to establish a health insurance exchange. Now, “the indication we’re getting is this could happen without it,” he said.

Insurance groups, however, question whether state agencies can do anything constructive without full support from state leadership. Jared Wolfe, executive director of the Texas Association of Health Plans, said Texas’ insurance market is too complex for a blanket federal exchange. 

“We knew anything related to federal reform was going to be controversial,” he said, “but we’d much prefer to see the state run it.”