As a follow up to our prior posting on the topic, we are relaying news today of Governor Kasich’s announcement that the State of Ohio’s agencies, funds and legal authority will not be used to set up or administer health insurance “exchanges” subject to the requirements and regulations of the federal Patient Protection and Affordable Care Act commonly called “Obamacare”.

By declining to enlist Ohio’s laws and resources in aid of the federal takeover of private health care the Governor has taken an important step back from a federal scheme that harms every Ohioan. The federal law takes fundamental rights from every American and will impose punitive taxes on those who make personal health care choices not approved by federal bureaucrats. Independent analyses by actuaries consulting with by the Ohio Insurance Department and the nonpartisan Congressional Budget Office show the federal mandates will inevitably lead to higher health care costs, doctor shortages, hospital closures and the loss of jobs and employer-provided healthcare for hundreds of thousands of Ohioans.

In keeping with their sworn duty to uphold Ohio’s Constitution, including the Healthcare Freedom Amendment adopted overwhelmingly by Ohio voters, it is essential that Ohio’s leaders continue to refuse in any way to entangle our state government in implementation of the healthcare mandates that are central to this disastrous federal scheme.

Maurice Thompson, Executive Director of the 1851 Center for Constitutional Law, commented in an 1851 Center press release:

We are pleased that the Kasich Administration heeded the clear effect of the Health Care Freedom Amendment (passed in 2011), which prohibited Ohio from enacting a state based Obamacare exchange.

We can now turn our attention away from the Kasich Administration, and begin to prepare litigation that ensures that Ohio employers will not be subjected to the $3,000 per employee fine, and that Obamacare ultimately collapses under the weight of its own legal infirmities.

Below we’ve included the full text of the letter sent by Governor Kasich to the “Centers for Medicare and Medicaid Services Center for Consumer Information and Insurance Oversight”  today, November 16, 2012:


November 16, 2012
Director Gary Cohen

Centers for Medicare and Medicaid Services Center for Consumer Information and Insurance Oversight
200 Independence Avenue, SW, Suite 739H
Washington, D.C. 20201


Dear Director Cohen,

This letter is to inform you of Ohio’s decisions regarding whether or not to implement the health benefits exchange mandated by the Affordable Care Act (ACA), and other issues. The law requires the Secretary of the U.S. Department of Health and Human Services (HHS) to certify states’ plans by January 1, 2013 and, in order for the Secretary to carry out this task, HHS is requiring states to submit an Exchange Blueprint.

My administration is committed to improving health care for all Ohioans through forward-thinking, solutions-oriented strategies aligned with our state’s ongoing efforts to create a jobs-friendly climate. Accordingly, we are modernizing Ohio’s Medicaid program, streamlining outdated health and human service delivery systems, implementing insurance market reforms and changing how we pay for care to reward value and coordinated care rather than volume.

We continue to make great strides in these endeavors despite significant headwinds expected from the law—higher health insurance costs, significant uncertainty in our insurance market and major new costs to states. Additionally, HHS is asking states to make final decisions on fiscally and economically significant and pivotal issues without promised federal guidance and rules for issues such as essential health benefits, market reforms, multi-state health insurance plans and more specifics regarding the federally-facilitated exchange. At this point, based on the information we have, states do not have any flexibility to build and manage exchanges in ways that respond to unique needs of their citizens or markets. Regardless of who runs the exchange, the end product is the same.

In light of this significant uncertainty and the negative impacts the law will have on Ohio:

  • Ohio will not operate a federally-mandated exchange but instead will exercise its right under the law to leave that to the federal government;
  • Ohio will not relinquish to the federal government its right to regulate its insurance market but, as permitted under the law, will instead retain the right to regulate the state’s insurance industry through the Ohio Department of Insurance as it has done very effectively for more than 60 years;
  • Ohio will not turn over to the federal government the right to determine Medicaid and Children’s Health Insurance Plan (CHIP) eligibility for its citizens but, as permitted by the law, will retain that function as well and manage that work through Ohio’s Medicaid director;
  • Ohio has no plans to run a state reinsurance program at this time, and;
  • The Director of the Ohio Department of Insurance is designated to work with HHS to finalize the Exchange Blueprint and work through other related issues.

Given that HHS has extended the deadline by which states must submit their blueprint applications, Ohio reserves the right to amend its intentions as stated in this letter, should HHS announce any changes or present states with new information, rules or interpretations of the law.

I am confident Ohio will meet federal standards to maintain its control of these responsibilities. In the meantime I urge you to promptly issue the guidance and rules Ohio needs to align plan management and Medicaid eligibility with an otherwise federally-facilitated health benefits exchange.



John R. Kasich


Also for your reference we have included the letter that Texas Governor Rick Perry sent to the Department of Health and Human Services Director Kathleen Sebelius on November 15, 2012:


November 15, 2012

The Honorable Kathleen Sebelius
U.S. Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, D.C. 20201

Dear Secretary Sebelius:

As I stated in my letter of July 9, 2012, Texas will not implement a so-called state exchange. In its current form under the Patient Protection and Affordable Care Act and through the yet undisclosed rules set forth by CMS, the exchange presents an unknown cost to Texas taxpayers. It would not be fiscally responsible to put hard-working Texans on the financial hook for an unknown amount of money to operate a system under rules that have not even been written.

It is clear there is no such thing as a state exchange. Instead, this is a federally mandated exchange with rules dictated by Washington. As long as the federal government has the ability to force unknown mandates and costs upon our citizens, while retaining the sole power in approving what an exchange looks like, the notion of a state exchange is merely an illusion. Your agency has broad rule-making authority, including the ultimate decision on what is an essential health benefit, which plans can operate in an exchange, and the ability to establish both price controls and cost sharing limits.

Our state will not be a party to helping facilitate the taxation of millions of Texans, at an unknown cost, to implement bad public policy.



Rick Perry

cc: Ms. Eleanor Kitzman, Commissioner, Texas Department of Insurance
The Honorable Kyle Janck, M.D., Executive Commissioner, Texas Department of Health and Human Services[/box]