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Mich. Senate Rejects Partnering On Health Exchange

By DAVID EGGERT, Associated Press

LANSING (AP) - The U.S. government will fully run a health insurance market in Michigan after Republican senators on Thursday decided against Gov. Rick Snyder's call to partner with federal officials on consumer assistance and oversight of health plans offered in the exchange.

It was the last day to act before lawmakers take a two-week break. Because the GOP-led Senate refused to spend a $31 million federal grant for the partnership exchange - a key component of the contentious 2010 federal health care law - the state will have to spend about $8 million of its own money to link computer systems to the federal exchange, Snyder spokesman Kurt Weiss said.

"We can't submit our plan on time and thus won't be approved to run the consumer assistance program which is a core component of the partnership exchange," he said.

The exchange will be used to determine people's eligibility for Medicaid and - if they buy insurance on the website, through a call center or in person - whether they qualify for income-based aid to help pay their premiums.

Senate Majority Leader Randy Richardville, R-Monroe, said there was "resounding disapproval" of the legislation among 26 Republicans who dominate the 38-seat Senate.

"There's just real concerns that the federal government is not prepared to enact what they have kind of forced at us," he said. "For us to sign up and say we can do it better when we don't even know what all the things are that are going to be required, we're just not on board with that."

It is the second time Snyder, a Republican, has been unable to persuade the GOP-led Legislature to help create an exchange.

The Senate got behind his call for a state-controlled market in 2011. But Republicans who control the House resisted throughout 2012.

With Plan B, the governor pitched a partnership run almost entirely by the federal government. The House recently assented - reasoning the Affordable Care Act is here to stay - but then support was lacking among Senate Republicans.

The Obama administration earlier this month also OK'd the partnership exchange, contingent on legislative approval.

The fact that the partnership was different from the state-run exchange the Senate passed previously was a factor, Richardville said.
The partnership would have let Michigan handle in-person customer service functions and manage insurers offering health plans on the exchange and "navigators" responsible for outreach, education and enrollment. Supporters had argued giving the state a role would save them from another layer of regulation and save the state money.

The Michigan Chamber of Commerce and Small Business Association of Michigan were among the business groups lobbying in favor of the partnership.

"We understand the political ramifications in supporting this grant, but ask you to look beyond that do what is best for Michigan," they wrote in a letter to senators.

Opponents, however, said the $31 million was a federal "bribe" and Michigan should not be responsible for implementing a bad law.

"Our leaders in the Michigan Senate listened to their constituents and wisely chose to avoid being complicit in the federal government's hostile takeover of our health care marketplace," said Scott Hagerstrom, director of Americans for Prosperity-Michigan, which also opposes Snyder's proposed expansion of Medicaid. "Michigan should not be in the business of giving even the slightest whiff of legitimacy to misguided federal policies that rob us of our economic freedom."

Open enrollment on the market begins Oct. 1, with coverage kicking in Jan. 1. Small businesses also can use the exchange.
At least 364,000 Michigan residents could get private insurance through the exchange in 2014. Depending on how many businesses sign up, a maximum of nearly 1.4 million people could enroll next year, according to the state.

Twenty-two states are running their own insurance markets or partnering with the federal government. Michigan is now among 27 to let Washington run their markets. Utah's status is unclear.

(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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