• • Do You Remember This???
• • Haslam decides to pass on state-run health insurance exchange
• • New insurance fee in health overhaul law likely to hit consumers

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Tennessee will pass on running health insurance exchanges and instead hand off those duties to the federal government, Gov. Bill Haslam said Monday.

The governor, who has faced months of mounting pressure from Republican lawmakers and phone calls from the public, said the federal government hasn’t given him enough confidence to buy into the idea of running the exchange. Haslam informed U.S. Department of Health and Human Services Secretary Kathleen Sebelius of his decision in a letter dated Dec. 10.

“There will be people who say, ‘Oh you are just making a political decision,’ he told Nashville Downtown Rotary Club members at the Wildhorse Saloon Monday. “If it was a political decision, we would have made this months ago.”

The federal government is now left to run the exchanges, which are online marketplaces for people and small businesses to comparison shop for health insurance plans. The exchanges are required by the Patient Protection and Affordable Care Act with open enrollment beginning next  October and health plans kicking in by January 2014.

Haslam, who has said he is opposed to the so-called “Obamacare” program, had for months put off his decision on whether to run the exchanges, first by saying he wanted to wait until after the presidential election, then by taking advantage of the federal government giving states an extra month to decide.

The governor has yet to decide whether to expand the state’s TennCare program, another decision that the governor is faced with under so-called “Obamacare.”

Haslam told reporters a decision on expanding the Medicaid rolls may not come until the General Assembly has adjourned for the year. Republican leaders are largely resistant to expanding the program.

Haslam had originally leaned toward the state running the exchange and said Tennessee could run the system “better and cheaper” than the federal government. But as the governor approached deadlines to decide whether to take on the exchange, he pointed to a lack of specifics from federal officials on details of the program “that is scary, quite franky.”

“There would be significant risk involved with taking on an exchange while your department is still developing the rules of the game or if the federal government is ultimately going to control the most important levers,” Haslam said in his letter to Sebelius.

Meanwhile, Republicans have been vocally opposed to signing up to a state-run exchange, including GOP lawmakers elected in November on platforms opposing “Obamacare.”

“The decisions regarding health care are best left to each Tennessean and their doctor — not a massive bureaucracy that is sure to send this country further into debt,” said House Speaker Beth Harwell, backing Haslam’s decision.

The governor’s office has fielded more than 4,000 emails and 2,000 phone calls from the public about the exchanges, according to the governor’s spokesman. Most of those phone calls came from people opposed to the exchanges.

A Tea Party rally outside the state Capitol building last week featured protesters demanding the governor “just say no” to a state-run exchange.

Health insurance companies such as BlueCross BlueShield of Tennessee were in favor of a state-run exchange but said they would work with the federal government instead.

“We certainly understand and respect the governor’s decision on the exchange,” said Bill Gracey, BlueCross CEO, told The City Paper. “With this clear direction, BlueCross will continue taking the steps necessary to have new individual products ready for Tennesseans when open enrollment for the exchange begins.”  Read more here.

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Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Obama's health care overhaul. 

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers. 

Employee benefits lawyer Chantel Sheaks calls it a "sleeper issue" with significant financial consequences, particularly for large employers. 

"Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it," said Sheaks, a principal at Buck Consultants, a Xerox subsidiary. 

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee. 

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines. 

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014. 

The program "is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all," the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to "contributions" without detailing the total cost and scope of the program. 

Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees. 

The $25 billion fee is part of a bigger package of taxes and fees to finance Obama's expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income. 

But the insurance fee had been overlooked as employers focused on other costs in the law, including fines for medium and large firms that don't provide coverage. 

"This kind of came out of the blue and was a surprisingly large amount," said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues. Read more here.

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