Lynch signs bill prohibiting state health exchange

Obscured by the vetoes he would issue later in the day, on Monday Gov. John Lynch signed into law a bill that prohibits New Hampshire from planning, creating or participating in a state health care exchange under the 2010 federal health care law. The Democratic governor did so with the support of the state Insurance Department and conservative Republicans dead set against the health care law passed under the Obama administration.

Lynch's signature was less an affront to the landmark reform passed by his party at the national level and more an acceptance of reality: After the Republican Legislature has resisted implementing a health care exchange for the last two years - including passing bills to send back to Congress grant money available to plan it - 'it's really too late for the state to be setting up its own exchange,' said Lynch spokesman Colin Manning.

'In effect, it really doesn't do much,' Manning said of Lynch signing the bill. 'If the Affordable Care Act is upheld by the Supreme Court, this bill will not prohibit us from participating in a federal exchange program which would offer consumers savings and choice.'

That was always the case - if the state didn't set up its own exchange, the federal government would come in and set one up. But now officials in New Hampshire and other states are keeping an eye on the U.S. Supreme Court to see what will be left of the law following a decision expected any day now.

'I'm very excited,' said Rep. Andrew Manuse, a Derry Republican opposed to the federal health care reform. 'I think the exchanges are the enforcement mechanism for the law. I think the law's going to fall apart if they strike down the individual mandate.'

Technically, New Hampshire has until Nov. 15 to declare whether the state would be setting up its exchange, having the federal government set it up or entering into a federal-state partnership of sorts. But with Tuesday scheduled as the last date to request grant funding to establish a state-based exchange, it's clear New Hampshire isn't going that route, according to state insurance department attorney Jennifer Patterson.

Patterson said the original version of the bill signed by Lynch this week was 'problematic.' The bill as introduced by Manuse would have also prevented the federal government from establishing a health insurance exchange in New Hampshire. The final version of the bill, however, was crafted during a meeting between Manuse, Patterson and Republican Sen. Ray White of Bedford, a leading supporter in the Senate.

Insurance officials have been wary of the Legislature's refusal to set up a state-based exchange out of concern that the state would cede regulatory authority to the federal government under a federal exchange. With a state-created exchange now out of the picture, Patterson and the two Republican lawmakers had similar interests: maintaining the state's regulatory authority once the federal government steps in.

The bill signed by Lynch seeks to 'preserve the state's status as the primary regulator of the business of insurance within New Hampshire.' And included in the bill's 'guidelines for interaction with federally-facilitated health exchange': 'Preserving to the greatest extent possible the state's insurance regulatory authority and the state's flexibility in determining Medicaid eligibility standards and program design and operation.'

Patterson said the bill as signed into law by Lynch opens the door to the state pursuing a state-federal partnership exchange instead of one left only to the federal government. Manuse doesn't interpret it that way. The final version seeks to make sure that if the federal government sets up an exchange, the state has as much power as possible, he said.

'Our intent is to resist,' Manuse said. 'We shook hands and walked out of the room happy on both sides.'

(Matthew Spolar can be reached at 369-3309 or mspolar@cmonitor.com or on Twitter @mattspolar.)