Indiana Gov.-elect Mike Pence closed the door on a state-run health insurance exchange Thursday, arguing that the estimated $50 million cost of the state program was not worth the limited autonomy granted in return.
Opposition to the state-based exchange has remained firm among Republican governors following President Barack Obama's re-election, and the realization that his health care law would not be overturned or repealed.
"I do not believe the State of Indiana should establish a state-based health insurance exchange because doing so will cost taxpayers millions of dollars and it is not clear that Hoosiers would benefit from incurring the cost of implementing this new federal healthcare bureaucracy," Pence wrote. "Without knowing more details on the cost and nature of state-based exchanges, it is possible that our state could be placed in the untenable position of serving as the administrator of a new federal healthcare bureaucracy over which we have little control."
Many of Pence's Republican soon-to-be counterparts, including some of the nation's staunchest conservative governors in Wisconsin and Florida, have warmed to the idea of partnering with the Department of Health and Human Services under the "hybrid" option. But it didn't sound like that was the case for Pence on Thursday, although he left the door ajar for a partnership.
"Furthermore, I remain opposed to our state pursuing a partnership exchange with the federal government and, absent new information, will make that known to the proper federal authorities by the deadline of February 16, 2013," he wrote.
Gov. Mitch Daniels told the gubernatorial candidates earlier this year that he would pass on their decision to the federal government ahead of Friday's deadline because one of them would ultimately be tasked with the implementation. If Pence declines the hybrid option in a few months, the federal government would build an exchange for Indiana and run it for a year.
The members of the Indiana Chamber of Commerce supported the idea of a state-run exchange in a survey, because of the power the state would have to work with insurers. But Mike Ripley, vice president for health policy and workforce safety, said the business group has not pushed Pence to approve a state exchange.
State lawmakers are expected to weigh in on the health care law when they return for their 2013 session in January.
Republican House Speaker Brian Bosma said he expected health care changes to add to Indiana's budget demands in the coming years. He tapped Public Health Chairman Tim Brown to take control of the powerful Ways and Means committee following the departure of longtime budget guru and former chairman Jeff Espich.
Brown, a Crawfordsville physician, will work with a team of Republicans including committee Vice Chair Suzanne Crouch to balance health-care spending with education funding.
"When you look at federal funds and state funds we spend more on those social services than we do on K-12, so it's a big part," Brown said.