(Adds insurance commissioner's comment)
By Emily Le Coz
JACKSON, Miss. Feb 8 Mississippi on Friday
became the first state to have its proposal for a health
insurance exchange rejected by the U.S. government, and federal
officials said Republican Governor 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.
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 healthcare reform law. But
he has argued that a state-based 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
"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 more
than a year 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
healthcare 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.
The federal government is likely to end up operating
exchanges in the states that have not applied to run their own.
States that don't run their own exchanges would opt for one
of two alternatives: a federally facilitated exchange that
requires minimal state participation, or a federal partnership
exchange in which states help by performing certain duties.
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.
(Editing by Colleen Jenkins, Alden Bentley and Eric Beech)