Michigan Gov. Snyder Vows to Set Up Health Insurance Exchange

Michigan Gov. Snyder Vows to Set Up Health Insurance Exchange
July 30, 2012

Marc Kilmer

Marc Kilmer (mkilmer@mdpolicy.org) is a Maryland Public Policy Institute senior fellow... (read full bio)

In the wake of the U.S. Supreme Court ruling on the constitutionality of President Obama’s health care law, governors are divided on how to respond to the requirement that states set up health insurance exchanges. Several Republican governors are opposing this provision, but one exception is Michigan Gov. Rick Snyder, who is pushing ahead with plans to establish an exchange.

A state-created health insurance exchange is the only way for individuals to access the taxpayer-funded insurance subsidies established by Obama’s law. The legislation tasked each state with setting up an exchange, and if a state does not, the federal government will establish one for the state. According to the text of the law, however, a federal exchange will not allow access to these subsidies.

Snyder had pressed state lawmakers to set up an exchange before the Court’s ruling, and legislation to establish an exchange known as MiHealth Marketplace passed the state Senate. However, members of the state House of Representatives opted to wait and see what the high court decided. Now that the decision is in, Snyder has redoubled his efforts.

“While I may not agree with everything in the law, now that the Supreme Court has essentially upheld the Act, we must act quickly to avoid an undue burden on Michigan residents and job providers,” said Snyder in a statement released when the Supreme Court’s decision was handed down. “Working with our legislative leaders to establish the MiHealth Marketplace will allow Michiganders to make decisions regarding what will be covered as opposed to Washington, DC making those decisions for us.”

Republicans May Block Governor

It is unclear whether Michigan House Republicans will act in a timely manner on the governor’s idea. Although the Republican leadership in the House has signaled it wants to begin work soon on implementation, Rep. Gail Haines (R-Lake Angelus), chair of the House Health Policy Committee, which has jurisdiction over the exchange, has said she thinks it may be prudent to wait until after the November elections to begin work on the issue. Attorney General Bill Schuette, a Republican, also signaled support for waiting until after November.

Jack McHugh, a senior legislative analyst with the free market Mackinac Institute, says Gov. Snyder is actually trying to accomplish something else with this health insurance exchange push.

“I believe the administration wants to ‘sneak’ through a Utah-type exchange under cover of the Obamacare ‘legislature mandate’ to create a state exchange or else suffer a federal one that may do things a state might not like,” says McHugh. “Republican Gov. Rick Snyder is a smart man who surely understands these are mutually incompatible entities—if Obamacare lives, then ‘Utah’-type exchanges become a dead letter, so I assume the idea is to leave one standing amid the rubble of if the federal health care law is repealed.”

As evidence of this view, McHugh notes the Senate-passed exchange legislation did not include a clause that would abolish the exchange if Obama’s law were ruled unconstitutional or repealed. Even though Snyder has consistently opposed the national health care law, he did not support incorporating an abolition clause even though groups such as the National Federation of Independent Businesses urged its inclusion.

‘Fruit of a Poisonous Tree’

McHugh says going forward with current legislation authorizing any health insurance exchange, including one modeled after Utah’s, is the wrong avenue for the governor.

“In my view, any entity created under such auspices would rightly be regarded as the fruit of a poisonous tree,” McHugh said.

“If Obamacare survives, it won’t matter,” he added. “If it doesn’t survive, Gov. Snyder should press ‘reset’ on this effort, and make a forthright case for a Utah exchange, preferably without the rhetoric and confusing hype, and preferably after another election cycle has passed in which he can make that case in an atmosphere not overheated by Obamacare pressures.”

Marc Kilmer

Marc Kilmer (mkilmer@mdpolicy.org) is a Maryland Public Policy Institute senior fellow... (read full bio)