- The Washington Times - Saturday, September 10, 2011

HENRICO, Va. — Virginia’s Health Reform Initiative Advisory Council is busy prepping final recommendations on how to set up a state health benefits exchange as mandated by President Obama’s health care overhaul — even as the commonwealth remains locked in litigation over the constitutionality of the law.

The council, comprised of state officials, lawmakers, and stakeholders appointed by Gov. Bob McDonnell, on Friday approved a broad outline for recommendations that will be forwarded to Mr. McDonnell and the General Assembly ahead of an Oct. 1 deadline.

“It’s kind of like eating an elephant — one bite at a time,” Secretary of Health and Human Resources William A. Hazel Jr. told The Washington Times. “We all have to face this, and no one wants to.”

Part of the federal health care overhaul, exchanges would market and sell insurance plans to those who lack insurance or small businesses that don’t offer their employees insurance.

The council recently voted to recommend that Virginia’s exchange be a “quasi-governmental agency” in the fashion of the Virginia Housing Development Authority, whose members are appointed by the governor but is financially self-supporting.

The board overseeing the exchange would be comprised of between 11 and 15 members appointed by the governor and the General Assembly and chaired by Dr. Hazel.

“You want it to be where consumers feel like they have a place to go,” said Cindi Jones, director of the initiative.

The Virginia General Assembly in 2011 passed legislation that laid the groundwork for the state to set up and operate an exchange, while stipulating that no qualified insurance plan sold or offered through the exchange provide coverage for abortion, except in the case of rape, incest, or when the life of the mother is in danger.

The legislation also dictated that “it shall not be construed or implied to recognize the constitutionality of the 2010 federal health care reform legislation.”

Indeed, the development comes even as Virginia is suing the federal government over the law, though a three-judge appellate panel recently ruled last week that the state lacked such standing, overturning a decision in December from U.S. District Judge Henry Hudson that had enjoined the so-called “individual mandate” provision in the law requiring most Americans to purchase health insurance by 2014 or face a penalty.

Mr. McDonnell, who was recently minted as the new chairman of the Republican Governors Association, said that “we respectfully disagree with this ruling” and has repeatedly criticized the law as an unfunded mandate that could cost the state about $2 billion by 2022, largely due to expanded eligibility requirements for Medicaid rolls.

“To conclude that a state has no standing to challenge an expensive and burdensome federal mandate on its citizens that the state has banned in its law, might cause James Madison and George Mason, Virginia’s principal drafters of our nation’s founding documents, to promptly roll in their graves,” he said. “To dismiss a Virginia statute as a basis for standing, declaring it to be ‘quintessentially political,’ and asserting that a state cannot be a ‘constitutional watchdog’ undermines our precious principles of federalism.”

The stance of Virginia’s top elected officials on the matter stands in stark contrast to that of the commonwealth’s neighbors across the Potomac.

Maryland is moving swiftly on implementing its own exchange. The General Assembly voted to set one up during this year´s session, and Gov. Martin O’Malley put $20 million in his budget for fiscal 2012 for the exchange, or marketplace.

The state also recently secured a $27.2 million grant from the U.S. Department of Health and Human Services to help set up its exchange. To date, the state has received $34.4 million to plan and build it, and Lt. Gov. Anthony G. Brown estimates that it will save the state about $850 million and cut the number of Maryland residents without health insurance in half by 2020.

The nine-member exchange board held its first meeting June 3.

By July 2011, more than a third of states had started laying the groundwork for exchanges that meet requirements outlined in the health care law, according to the non-partisan Kaiser Family Foundation.

• David Sherfinski can be reached at dsherfinski@washingtontimes.com.

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