Michigan mulls joint state-federal health exchange

LANSING, Mich. (AP) ? Republican Gov. Rick Snyder's administration is considering partnering with the federal government to run a health insurance exchange because Michigan is running out of time to set up its own if the U.S. Supreme Court holds up one of the key provisions of the federal health care overhaul.

Michigan House Republicans have refused to let state officials use $9.8 million in federal planning dollars to start setting up the MI Health Marketplace, saying they're waiting to see whether the court strikes down any or all of the Affordable Care Act on Thursday.

But state Licensing and Regulatory Affairs director Steve Hilfinger, who Snyder tasked last year with creating the state's online insurance marketplace, has warned for months that Michigan could run out of time to get a state health exchange approved by January as the federal law requires. Snyder is one of few Republican governors to acknowledge considering a possible state-federal partnership to get an exchange in place.

"I'm just trying to be a pragmatist here," Snyder told The Associated Press on Tuesday.

Snyder has expressed support for the idea of a health insurance exchange that would set up a way for small businesses and individuals to compare private health insurance policies and buy them online, much as they would shop for an airline ticket or hotel room. But he wants to give a nonprofit company the authority to set up the exchange and have it running by 2014.

State officials have estimated more than a half-million Michigan consumers would purchase a private policy through an exchange once it's up. About 1.27 million Michigan residents ? 13 percent ? didn't have health insurance in 2010, according to the U.S. Census Bureau.

The state so far hasn't been able to do the detailed information technology work required to map out an exchange. If the health insurance exchanges are upheld by the Supreme Court, Michigan and other states would have to apply for additional funds to get the marketplace up and running. The last day to apply for those funds is Friday, but later grant application dates are expected to be set.

Michigan has been planning for a state exchange as much as possible with $1 million from an earlier federal grant, said licensing and regulatory spokesman Mario Morrow. But it also has been talking to federal officials about setting up a federal exchange where the state handles just some of the responsibilities, such as customer service.

"A state-based exchange is still our preferred option, and we think there is still a path to get there even after the Supreme Court rules," Morrow said. "But we are preparing for all eventualities because the current federal timelines are so tight."

GOP House Speaker Jase Bolger, who has opposed funding an exchange plan before the Supreme Court ruling, would prefer to not partner with the federal government, spokesman Ari Adler said.

"He would prefer that there not be one, but if there is going to be one, it would be better if the state controls setting it up instead of letting the federal government do that," Adler said. Still, Adler said he believes "the speaker and others are open to listening to the governor's ideas."

Michigan Attorney General Bill Schuette, meanwhile, thinks a decision to throw out the federal law's requirement that nearly all citizens buy health insurance would be a huge victory. Schuette views the individual mandate as "an unconstitutional overreach," and many Republicans agree with him. Polls show the mandate also is unpopular with voters.

But hundreds of thousands of Michigan residents already have benefited from the law, and could see those benefits disappear of it is struck down.

More than 23,000 Michigan seniors and people with disabilities have saved $17.6 million this calendar year on prescription drugs because of the law, an average of $757 per person, according to federal statistics. The money goes to help residents with medical costs after they hit the Medicare Part D prescription drug coverage gap, the so-called "doughnut hole."

More than a half-million Michigan seniors have received a free preventive health care service so far this year, 1.8 million residents now receive preventative services with no co-pay and 57,000 more young adults in Michigan under the age of 26 are on their parents' health insurance plans because of the federal law.

Last week, U.S. Health and Human Services director Kathleen Sebelius visited Detroit to announce $3.7 million in grants for six Michigan health centers to help expand access to care for 59,431 additional patients.

In addition, 114,000 Michigan residents will get $13.9 million in rebates from insurance companies this summer because of a rule that requires insurance companies give rebates if they don't spend at least 80 percent of consumers' premiums on medical care and quality improvement. The rebates will average $214 for 65,000 Michigan families.

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Follow Kathy Barks Hoffman on Twitter: http://twitter.com/kathybhoffman

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