Governor's Blog: Why We Must Act Now on Health Care
Governor Rick Snyder
July 3, 2012
Following the Supreme Court's decision on the Affordable Care Act, a firestorm of cries erupted from across the country calling for swift action to repeal the law, and that anger is understandable. The health care law fails to make important reforms needed in our health care system, has been a serious detriment to our economic recovery, and imposes significant new taxes on businesses and the American people. But with the Court's decision, it is my responsibility as governor to ensure that the people of our state are protected from even greater overreaches by the federal government. That is why it is vital that we move forward and implement our own health insurance exchange before Washington imposes one upon us.
Health insurance exchanges are marketplaces where people can choose from a variety of health care plans offering different features. Think of it like Travelocity, Expedia or Orbitz, where you can log-on to your computer, search for airline flights, and pick the one that's best for you. Today, Michigan has the opportunity to design our own health care exchange -- and we can create one that works for the people of Michigan and is not an undue burden on job providers. That's not something we can achieve if we sit back and wait for the federal government to take control.
Some people are saying that Michigan should wait to take action in hopes that the law will change. But there are four important reasons that we cannot wait -- and I'd like to take this chance to explain them to you.
1) Deadlines Are Approaching
Under the health care law, each state is required to operate a health insurance exchange by January 1, 2014. That might seem like a long way away, but there are other deadlines, too. Federal regulations require that open enrollment -- when Michiganders can start signing up for health plans on the exchange -- start on October 1, 2013. However, the federal government must certify that the state is on track to meet this goal by January 1, 2013. In order to do that, Michigan has to submit an application to the federal government by November 16, 2012, less than 5 months from now.
And that's the important part. If the federal government finds that we're not prepared, they will step in and establish a federally run exchange in Michigan. We have no idea what that would cost, and they would be calling the shots. That's why we have to act.
2) Millions of Dollars in Funding Are At Risk
Washington is offering a carrot to the states in order to encourage them to set up their own exchanges. To meet the deadlines in the law, the federal government will provide states with funding to assist with the planning, development and establishment of an exchange. This funding is available in the form of federal grants with no state match required. But if we don't meet those deadlines, we lose out on that funding. Already, we're in jeopardy of losing nearly $10 million.
To be clear, we don't take and spend federal money just because it is available. After all, that money comes from the American taxpayers and should not be wasted. But even if the Affordable Care Act were to be repealed, we can use those federal dollars today to make much-needed improvements to our state's IT system, irrespective of the law's ultimate fate. And that's a good result for the people of Michigan.
3) We Can Avoid Unnecessary Costs
This is a very complex project which requires intense coordination between the state and federal government, the private sector and the health insurance industry. A general rule of thumb is that insurance and uncertainty to do not mix. More uncertainty leads to higher insurance costs. Higher insurance costs lead to a larger burden on Michigan families and job providers. If we act now, we can help avoid unnecessary cost increases and a federal exchange that may not meet the needs of Michigan families and businesses.
4) We Must Be Fiscally Responsible
Now that the Supreme Court has ruled on the health care law, other states around the country are going to be scrambling to secure the services necessary to stand up their exchanges. If we wait, then the private sector will have their resources in other states, which will drive up costs for Michigan when we need their help. If we act now, we can avoid having to pay higher costs down the road -- and that's the fiscally responsible thing to do.
The Affordable Care Act is not the law I would have enacted, but it is the law that we have. Yes, it is possible that it will be repealed and that Washington will change course, but we cannot bury our heads in the sand until that day comes. We have the opportunity to act now and create a health exchange that works for the people of Michigan, and that's an opportunity we should take.