Gov. Scott Walker said Friday that Wisconsin won't set up a virtual marketplace for connecting consumers with private health insurance plans, ceding control to the federal government as Republican governors in other states have also done.
Walker's decision was not a surprise given his and the GOP's long opposition to the federal health care law. But a wide array of groups that have supported Walker, including the state's influential chamber of commerce, had urged him to have Wisconsin establish its own exchange rather than turning over control to the federal government.
Walker said in his letter to the Obama administration that the risks to Wisconsin taxpayers once federal funding dries up were too great.
"In Wisconsin, we have been successful in providing health insurance coverage to over 90 percent of state residents without the creation of an exchange and absent federal regulation," Walker wrote in the letter to U.S. Health and Human Services Secretary Kathleen Sebelius.
In a separate letter explaining his decision, Walker said no matter who sets up the exchange the federal government will make all the decisions and the product will be the same. He also said the law does not allow for a "uniquely Wisconsin option."
"As a result of our decision, Wisconsin taxpayers and consumers will have access to the same products without the risk of having an extra burden placed on them at a time when they can least afford it," Walker said.
By not setting up its own exchange, Wisconsin will lose control over several key decisions over how easily consumers will be able to compare insurance plans, what plans can be sold through the exchange, what the plans must cover and their cost.
Additionally, the exchanges will offer coverage to people buying in the individual and small business markets, and those are areas that states have traditionally regulated. Without a state-run exchange, states would undercut the role of their own regulators in an important new market.
Walker stopped implementation last year on the hopes the law would be overturned either by the U.S. Supreme Court or Republicans following the November election. But the Supreme Court upheld the law in June and President Barack Obama's victory earlier this month ensured the law's survival.
A broad coalition of groups that rarely get on the same side of an issue were urging Walker to have Wisconsin set up the exchange so it had more control over how it would function. Those groups including Wisconsin Manufacturers and Commerce, the state chapter of the National Federation of Independent Businesses, health care advocacy groups that support universal health care and the insurance industry.
Kurt Bauer, president of WMC, said in a statement that Walker made a "good case" for not doing as WMC wanted and having the state implement the exchange. Bauer said WMC will continue to work with Walker and the state's businesses to "navigate through the burdensome requirements of the Affordable Care Act."
Tea party groups and conservative Republicans in the Legislature had pressured Walker not to move forward with the exchange, a virtual marketplace connecting consumers with private health insurance providers. Nine Republican lawmakers went so far as to tell the tea party group Campaign for Liberty that they would back legislation to arrest federal officials who took steps to implement the Affordable Care Act in Wisconsin.
As of Friday morning, 22 states plus the District of Columbia said they would run their own exchanges or partner with the federal government while 14 states, including Wisconsin, said they would defer to the federal government. Fourteen states had yet to decide.
Walker announced the state's intent Friday even though the Obama administration late Thursday agreed to a request by Republican governors for a month's extension for making a decision.
The law is expected to provide coverage to more than 30 million people nationwide through the exchanges and expanded Medicaid programs. The Medicaid expansion is voluntary and Walker has indicated reticence to moving forward with it in Wisconsin.