Blocking Montana's health insurance exchange bill backfires 

Over a year ago, when the Montana Legislature was in session, the House Business and Labor Committee considered a bill to create a state-based health insurance exchange—an online marketplace—under the newly passed federal Affordable Care Act. Rep. Edward Greef, a Republican from Florence, remembers that in the wake of the passage of health care reform, there was an "overriding sense of confusion," and so Republicans, who outnumbered Democrats 14-7 in the committee, let the exchange bill die. Greef says they were wary of the health insurance mandate, and figured "if the act gets repealed or is unconstitutional, we won't have to deal with this."

The U.S. Supreme Court upheld the law last week, but now Montana can't create its own insurance exchange. It's too late. Jan. 1, 2013 is the deadline for states to demonstrate to the feds that their exchanges will be up and running by 2014, and the Montana Legislature doesn't meet before then.

Instead, the U.S. Department of Health and Human Services will implement Montana's exchange, assuring more federal intervention in the state's health insurance market than if the legislature had passed HB 124—the very thing, it appeared, many Republican lawmakers in Montana wanted to avoid.

"We lose a lot of decision-making authority over the exchange," says Lucas Hamilton, spokesperson for Montana insurance commissioner Monica Lindeen, a Democrat.

Lindeen lobbied hard for the passage of HB 124. Without it, the state loses out on millions of dollars in grants. The feds will run the technical aspects of the exchange, market it to Montanans and approve the private insurance plans included in it. Because the state must also approve those plans, it will lead to "double regulation," Hamilton says. He says it's unfortunate. "We know our market better, we live here, we actually purchase these polices ourselves, we know the needs of Montana consumers. So we definitely think that a state-based solution would have been preferable."

Montana's not alone: Only 10 states and the District of Columbia have passed laws enacting exchange programs, according to the Center on Budget and Policy Priorities.

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