Indiana has spent the past year and a half planning for its own health insurance exchange in case the U.S. Supreme Court upholds President Barack Obama's health care law, but the state still could end up being forced into the federal exchange.
Gov. Mitch Daniels ordered state agencies to investigate the cost and feasibility of an online health insurance marketplace in January 2011. Although Indiana appears to be ahead of some states that say they want to create their own exchanges, it's still possible Indiana may not be ready in time.
"We've completed cost estimates, legal analysis, surveys and other requirements," Daniels spokeswoman Jane Jankowski said Tuesday. However, she added, "No decision about establishing a state exchange has been made."
Indiana hasn't enacted a law creating its own exchange and Daniels told the agencies to keep their work in the planning stages.
The court, expected to rule Thursday, could uphold it or overturn all or part of it. Insurance exchanges, a key part of the law, would allow residents to comparison shop online for insurance starting in 2014. States can run their own exchange, form a state-federal partnership to create one, or have the federal government step in and take over.
Daniels gave himself broad power to create an exchange, via an executive order he wrote in 2011 and enabling legislation approved by lawmakers. However, that power could be muted because Daniels is term limited from seeking re-election in November.
A spokesman for Democratic candidate John Gregg did not immediately return a request for comment Tuesday. Christy Denault, a spokeswoman for Republican gubernatorial candidate Mike Pence, said the campaign is waiting to see what the court does. Pence has made clear in numerous campaign speeches that he would fight the law, much as Daniels and Indiana Attorney General Greg Zoeller have.
Even with Indiana's extensive preparation, which has included meetings with small focus groups and legislative panels over the last 18 months, the state could still find itself in a rush to build an exchange if the court upholds the law. The Department of Health and Human Services has set a deadline of Nov. 16 to submit plans. If the plans are not approved, the state could be forced into the federal exchange being crafted.
Daniels has pursued a dual path since the health care law was passed, consisting of blasting the law publicly while preparing for it in the case the justices do uphold the law, said David Roos, executive director of Covering Kids and Families of Indiana.
"I hope and fully expect the state of Indiana will continue to move down parallel paths that keep open reasonable options for the future that includes the implementation of at least parts of the Affordable Care Act," Roos said.
Within the Indiana Legislature, there has been a somewhat successful push for a conservative alternative to the health law, called the Health Care Compact, which would remove health care decisions from the federal government and set them with the states. While a half dozen states have approved this alternative, however, it would still need to win approval in Washington before taking effect.
According to the Indiana Family and Social Services Administration, 850,000 Hoosiers are uninsured. That's about 13 percent of the state population.
The law includes many pieces that would change how states administer health care, including a requirement that states expand their Medicaid roles. (Daniels lost a prior battle with President Barack Obama's administration when it rejected Indiana's request to expand the state's health savings account plan to cover more Medicaid recipients. Federal officials said last September that request was premature.)
For the states, however, the requirement of setting up an insurance exchange may be the most daunting piece of the law.
Indiana has received roughly $8 million in federal grants to complete its planning. That money has been used to determine, in part, how insurers and businesses would enter the exchange, Seema Verma, the health care consultant helping Indiana navigate the federal law, told lawmakers in October.
Where that money ends, however, is in the actual construction of an exchange, specifically the IT infrastructure, she said.
"We do not have funding though to pursue the systems that would be required to support an exchange," Verma told the General Assembly's Health Finance Commission.