JUNEAU -- Alaska Gov. Sean Parnell on Tuesday rejected the idea of a state-run health insurance exchange under the federal health care law, saying "federally mandated programs should be paid for by federal dollars."
An exchange is a marketplace for coverage options. Under the federal health care law, the government can step in and establish exchanges in states where none exist.
Parnell last year angered some Democratic state lawmakers by refusing to apply for federal funds to help set up an exchange. In February 2011, he said the state would pursue lawful, market-based solutions of its own, including looking at the potential for an exchange without the "shiny but poisonous apple" of federal dollars and mandates "that create federal dependency and control."
On Tuesday, Parnell's decision was announced shortly after the state health department released a consultant's report on exchange design options and costs. The report, by Public Consulting Group, modeled the cost of an exchange at $6.7 million, and recommended consideration of such things as a consumer administrative fee and advertising revenue to help cover the cost. The analysis was based on a potential exchange enrollment of 77,000.
The report made no firm recommendation on the route the state should take. "If there was no political debate or controversy regarding health insurance exchanges, PCG would recommend the State consider initially implementing a state-federal partnership model with transition to a state-based exchange in 2016 or later," it said.
Later, the report said: "However, to date it is impossible to separate out the political impacts and clearly identify the actual cost of a state-federal partnership, so there remain too many unknowns for PCG to make a recommendation."
The report was dated June 21, a week before the U.S. Supreme Court upheld most of the federal health care law.
In a statement, Parnell said using state funds and personnel to design and implement an exchange is the most expensive option before the state.
"It doesn't make sense to spend Alaskans' dollars to set up an exchange when so much uncertainty exists about how to implement it and how to gain federal approval," he said.
Alaska was one of the states that sued over the health care law. During a news conference after the court's decision, Parnell said that, where reasonable, he wants to shift back to the federal government costs associated with implementing the law.