Haley To Reject Federal $$$ For S.C.’s Health Exchanges

Gov. Nikki Haley said she will let federal deadlines slip by and not accept millions in federal funds to help South Carolina set up its own health insurance exchange.

Health insurance exchanges, the centerpiece of federal health care reform, are online marketplaces, to be set up by each state, where the uninsured could compare insurance plans from private insurance companies and buy the one that best fits their needs. Uninsured people who meet certain federal poverty guidelines could buy coverage using federal tax credits.

The exchanges are scheduled to open in 2014 when the health care law goes into full effect. If a state has not made progress by Jan. 1, 2013, the federal government will step in.

But Haley and Tony Keck, whom Haley appointed to head the state’s Department of Health and Human Services, say the federal plan is not the right fit for South Carolina.

“The governor remains an equal opportunity opponent of ObamaCare, the spending disaster that South Carolina does not want and cannot afford,” said Rob Godfrey, Haley’s spokesman. “She and Tony Keck are focused on finding South Carolina solutions that provide our state with the most health at the least cost.”

Democrats say Haley is playing politics with an important issue that affects millions of South Carolinians. Other Republican governors, including Texas Gov. and GOP presidential candidate Rick Perry, also are saying they will not accept the money.

“If South Carolina would put half the effort into figuring out how to do this versus being opposed to it, we would be light years ahead in making sure people could get health care coverage they need,” said Rep. Gilda Cobb-Hunter, D-Orangeburg, who sponsored a bill this past session to set up a state health exchange.

“Governor Haley and all these people spouting the rhetoric have good health coverage,” Cobb-Hunter said. “The people who don’t have a place at the table, their voices are not being heard.”

Twenty-one percent of South Carolinians under age 65 are not insured, according to a 2004 survey by the state Department of Insurance, meaning they do not have private insurance or public insurance such as Medicaid or Medicare. An updated study is being conducted now for the department.

Keck said his opposition to applying for the money is that federal rules for the new exchanges are still not clear. And that’s making officials in many states hesitant to accept money and agree to yet-to-be-determined rules and regulations.

“Every state is so far behind in implementing their exchanges because we have not gotten the information we need from the feds on how this will work,” Keck said. “The federal government has been letting the proposed rules and regulations trickle out.”

Outstanding questions, according to Keck, including how the states will distribute the federal subsidies to the private insurance companies and what components of the exchanges the states must run vs. what components the federal government will run. Small businesses can also use the exchange to buy insurance and the rules on how that will work are also murky, Keck said.

“Right now, it’s smarter for the state to wait and see what rules actually come down and what solutions the federal government comes up with to the many unanswered questions and what other states come up with,” Keck said. “And, if (South Carolina) decides later that it makes sense for the state to run it, then we’ll run it. But that may be years off.”

Sixteen states and Washington D.C. have accepted the funds thus far, according to the U.S. Department of Health and Human Services.

Last year, then-Gov. Mark Sanford accepted $1 million in federal grant money to being exploring an exchange.

A task force, funded by the money, meets monthly to discuss the implementation of health care reform.