Wisconsin to have federally-run health exchange

Published On: Nov 16 2012 06:07:04 PM CST   Updated On: Nov 16 2012 07:02:22 PM CST
LA CROSSE, Wis. -- -

President Barack Obama's Health Care Reform Law, the Affordable Care Law, leaves states across the nation with big decisions to make.

One of them is how to set up a health insurance exchange.

It's a decision Gov. Scott Walker announced on Friday.

The health insurance exchange is basically an online marketplace for individuals and small businesses to shop for health insurance.

Walker had a choice between a state-run exchange, a partnership between the federal government and the state, or a federal exchange.

Walker announced on Friday Wisconsin will have a federal exchange.

On the surface, Walker said choosing a state-run health insurance exchange seemed like a good idea.

"Instinctively on any issue, I like most governors across the country, Republican and Democrat alike, when given a choice, would prefer state run over anything run by the federal government," said Walker.

But take a closer look at the options and Walker said the state-run exchange may not be as good as it sounds.

"They don't give the kind of true flexibility that would allow something unique for our state, the state of Wisconsin," said Walker.

Health experts said while the state-run exchange does give some options, in the long run the federal government still has the final say.

"There's a little flexibility the state would have in terms of the exchange, however, with the federal exchange they put pretty strict restrictions in for what the states can and can't do. But on the state-run exchange there's a little more flexibility but they're still pretty much stuck with what the federal government has put in for rules," said Michael Richards with Gundersen Lutheran.

It's the lack of flexibility combined with the cost to taxpayers which led Walker to announce that Wisconsin would let the federal government set up its health exchange.

"A state-run exchange might expose the taxpayers of Wisconsin not just federal taxpayers but individual state taxpayers. It's a greater liability and greater cost in the future and so that's ultimately what made our decision," said Walker.

Walker's office said funding from the federal government for a state-run exchange would only last until 2014.

While avoiding extra costs for the state is the driving motivation for Walker's decision, it may not completely save the taxpayers from having to shoulder extra expenses.

"There's no guarantee in any of it. It just makes it one step removed and one step more difficult to pass those costs on," said Walker.

The governor of Iowa announced the state will opt for a state-run exchange, but may defer to a federally run exchange if enough questions aren't answered.

Minnesota is also planning on creating its own exchange.

The health insurance exchanges won't go into effect until January 2014 when all Americans will be required to have health insurance coverage.