"The work your Insurance Department has done thus far to ensure that Mississippi maintains broad authority over its health insurance market makes Mississippi an excellent candidate for a State Partnership Exchange," Gary Cohen of the U.S. Department of Health and Human Services wrote to Mississippi Insurance Commissioner Mike Chaney.
However, Chaney said he doesn't want to do a partnership because he believes the state would simply be in charge of fulfilling federal mandates without influencing how the exchange is run.
"The feds call the shots and we do all the work," Chaney told The Associated Press. "I'm not going to do that."
Chaney, a Republican, sought HHS approval of the state-run exchange in November even though Republican Gov. Phil Bryant said he wanted nothing to do with the federal health care overhaul that President Barack Obama signed in 2010. Chaney argued that the state, not the federal government, should run an exchange that's now required by law.
An exchange is an online marketplace where people can buy health insurance. Under the health care law, each state must have an exchange by 2014. The exchanges can be run by each state, the federal government or as a partnership.
Chaney held a news conference Thursday to announce that HHS had blocked the application he submitted for a state-operated health exchange. He said then that the reasons for the rejection were not immediately clear.
Cohen is director of the Center for Consumer Information and Insurance Oversight, which is part of the Centers for Medicare and Medicaid Services under HHS. In the letter Friday, Cohen wrote that any proposal for a state-run exchange must be signed by the governor. After Chaney submitted a proposal to HHS in mid-November, Bryant sent two letters to HHS objecting to Chaney's blueprint.
"With a lack of support from your Governor and no formal commitment to coordinate with other State agencies, we do not see a feasible pathway to conditionally approving a State-based Exchange in Mississippi for 2014," Cohen wrote to Chaney.
HHS approved a partnership exchange for Arkansas last month. Feb. 15 is the deadline for Mississippi or other states to apply to run a partnership. If Mississippi does not apply to run a partnership, and if Bryant does not change his mind, the state is on track to have an exchange run by the federal government.
Chaney said that instead of trying to revive work on an exchange under the federal health overhaul, he will instead work now on a "free-market exchange" that would allow small businesses to shop for insurance online.
Bryant's office issued a statement Friday saying that any exchange that has a government role, state or federal, can't be considered a free market exchange.
The U.S. Supreme Court upheld most of the health care law last summer, though some Republicans still hold out hope that Congress can someday overturn the law. The court said that a major component of the law, the states' expansion of Medicaid to cover uninsured individuals and families, is optional rather than mandatory. Bryant also opposes expanding Medicaid to cover hundreds of thousands of uninsured Mississippians.
"If enough states exercise their clear and completely legal options to resist its implementation — including declining to establish exchanges and rejecting the Medicaid expansion — Congress will be forced to reopen the law, and a Republican-controlled House will be in a stronger position than when the law was first rammed through," Bryant said in a statement.
Associated Press writer Laura Tillman contributed to this report.
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