White House rejects Chaney’s health exchange plan

JACKSON — The Obama administration has rejected Mississippi’s proposal to create a state-run health insurance exchange, according to state Insurance Commissioner Mike Chaney, dealing a blow to his bid to craft an exchange despite the opposition of Republican Gov. Phil Bryant.

Chaney, during a news conference, said he was “sorely disappointed” that the application had been denied.

“The effect on this state is going to be draconian in nature,” said Chaney, a Republican who drew up plans for an exchange to give the state more control over implementation of a federal health care law that remains unpopular among many Republicans.

An exchange is an online marketplace where people can buy health insurance. Under the federal health care law that President Barack Obama signed in 2010, every state is required to have an exchange so people can get coverage starting in January 2014, much of it federally subsidized. States that don’t create their own will have one run by Washington.

Chaney submitted an exchange proposal to the U.S. Department of Health and Human Services in mid-November. He said Thursday that he’d received word from HHS that the proposal had been denied, but that he was still waiting for an official letter outlining the reasons.

Bryant, a Republican, objects to the federal health care law and sent two letters to Health and Human Services Secretary Kathleen Sebelius trying to block Chaney’s proposal.

An HHS spokesman declined to comment publicly on the decision.

While HHS hasn’t yet detailed why the blueprint was denied, federal rules state that a coordination strategy with other agencies must be developed and documented. Bryant’s objections to the state-run exchange make it unclear how such a strategy would function.

Chaney said he had tried to work with the White House to win approval, but “I feel betrayed at this point.”

“When the call came today, I think HHS was much more upset than I was,” Chaney said. They had given their best efforts, but the decision came from the very top, it came out of the White House. When the No. 2 or 3 person from HHS is on your side, you know the decision is coming from elsewhere.”

Chaney and his staff had worked on the exchange proposal for several months, spending about $4.5 million in federal money on the effort.

The Chaney-Bryant rift over the health exchange is a rare public dispute between members of the Republican Party, which controls most statewide offices.

“I firmly maintain my position that Mississippi will not willfully implement a mechanism that will compromise our state’s financial stability,” Bryant said in a statement late yesterday, adding that he had not been officially notified of the decision.

Chaney called Bryant a friend at the press conference and said “reasonable people can disagree about an issue.”

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