Reject Insurance Exchange in W.Va.

Gov. Earl Ray Tomblin has been given another month to let the federal government know whether West Virginia will set up its own health insurance exchange. He reportedly had decided on a “thanks, but no thanks” answer by Friday, the previous deadline set by the Department of Health and Human Services for states to declare their intentions.

Tomblin’s initial inclination was right. He should stick to it regardless of how much pressure is exerted on him – and there probably will be plenty of it.

State insurance exchanges are part of the national health care law – “Obamacare.” Under the scheme, states would set up systems whereby some individuals, families and small businesses could shop around for insurance. Though states would write some of the rules, including what types and levels of coverage could be offered, much of that would be dictated in Washington.

Though governors have known for many months they would have to decide, just 22 states have agreed to set up their own exchanges by the DHHS deadline. It is likely the additional time was provided so pressure can be put on hold-out governors such as Tomblin.

In reality, of course, there is no deadline. In states opting out of the system, the DHHS will administer it – but states are free to set up their own exchanges at any time.

State-run exchanges will be bad deals for those who bow to the DHHS’s wishes.

They will cost states millions of dollars a year to run, though the DHHS insists it will help with those costs. Observant West Virginians will have noted a long list of programs the federal government pledged to help fund over the years, only to dump burdens back on the states.

Again, almost all the rules will be set in Washington. But residents of states that have their own exchanges will, quite naturally, blame state officials for limited options in coverage and high prices for health insurance policies. That, too, is an old federal government trick.

One very practical reason for rejecting a state exchange: If the federal government runs it, businesses would be exempt from a requirement they either furnish expensive DHHS-approved insurance or pay a $2,000 per-worker tax each year.

The so-called “employer mandate” would be exceedingly hard on many of the small businesses that are the primary job creators in West Virginia.

Again, Tomblin is right in his decision not to set up a state insurance exchange. Doing so would create no benefits for Mountain State residents.

Because of the “employer mandate,” a state exchange actually could prove detrimental. The governor should hold his ground during the next four weeks, at the end of which he should inform DHHS the state will not do the agency’s bidding.