Debate over health exchange in Va. may hit roadblock

The public debate is under way in the Senate over how to create a health benefits exchange in Virginia, but any legislation appears headed to a dead-end in the House of Delegates.

House Speaker William J. Howell, R-Stafford, said Wednesday that he would discourage approval of legislation in the current General Assembly session to create an exchange.

"I only have one vote, but I can discourage it," Howell said in an interview. "It's an unnecessary expense at this point."

The speaker's position mirrors that of Gov. Bob McDonnell, who doesn't want the state to take action to establish an exchange until after the U.S. Supreme Court rules on the constitutionality of the federal health care reform law that would require its creation.

But key Republican legislators in the Senate say they do not believe Virginia can wait for a ruling on the Patient Protection and Affordable Care Act and meet looming federal deadlines if the law were upheld.

Sen. Jeff McWaters, R-Virginia Beach, said "it would be problematic" for the legislature to wait until 2013 to make decisions on an exchange that must be prepared to enroll participants by that fall and begin operating on Jan. 1, 2014.

"I strongly believe that that's impossible," said McWaters, chairman of a Senate Commerce and Labor subcommittee that on Wednesday began reviewing four legislative proposals to create a state exchange.

Commerce and Labor Chairman John C. Watkins, R-Powhatan, sponsor of Senate Bill 496, warned that Virginia risks having a federal exchange imposed if the state fails to submit a plan for an exchange later this year that the U.S. Department of Health and Human Services certifies by Jan. 1.

"Some will say (federal officials are) going to push the dates back — that's speculative," Watkins told the subcommittee. "I am concerned that if we defer to that speculation, we will not have a plan in place and we may by default end up in a federal exchange."

That fear is shared by the health insurance industry, which wants the General Assembly to make decisions now on where the exchange would be housed and how it would be governed, as well as the benefits that competing health plans would have to provide.

"We're very concerned about meeting deadlines for being fully operational by fall '13," said Megan P. Padden, vice president of government programs and compliance at OptimaHealth, based in Virginia Beach.

Three other proposals to create a health benefits exchange are pending in a subcommittee of the House Commerce and Labor Committee for review next week, but none appears likely to reach the House floor over Howell's objection.

The speaker said he does not want Virginia to waste time and money on a requirement that could be overturned by the Supreme Court or repealed by a future Congress, especially if President Barack Obama is not re-elected this fall.

"It's an expense and an effort we don't need to go through at this time," said Howell, who did not rule out a special legislative session being called to take up the issue after the court's ruling, expected by the end of June.

All seven bills to create an exchange provide that the law would expire if the health care act were overturned or repealed.

Americans for Prosperity, a conservative political organization, issued a statement on Wednesday opposing approval of a health benefits exchange in Virginia until the court rules.

"These exchanges are a simple means for the federal government to expand bureaucratic control," said Audrey Jackson, the organization's state director.

Watkins and other senators contend an exchange would benefit Virginians and that the state should act now to set the rules for it.

"There seems to be wide agreement that it would be advantageous for Virginia to take a leadership role and move forward," said Sen. Barbara A. Favola, D-Arlington, who introduced the seventh bill (SB 615) on Friday with Sen. Ralph S. Northam, D-Norfolk.