Tennessee Governor Bill Haslam recently announced that Tennessee will not set up a state-run insurance exchange under the Patient Protection and Affordable Care Act. Instead, he will allow the federal government to set up and run a health insurance exchange for the state of Tennessee. Governors in all 50 states were required to announce by December 14, 2012 their intent as to whether they plan to set up a state-run exchange; allow the federal government to run the exchange; or enter into an agreement with the federal government to operate a “partnership” exchange. 

According to a transcript of his prepared remarks, Governor Haslam reached this decision after thoughtful consideration: “This decision comes after months of consideration and analysis. It is a business decision based on what is best for Tennesseans with the information we have now that we’ve been pressed hard to receive from Washington. If this were a political decision, it would have been easy, and I would have made it a long time ago.”

Haslam explained, “I am not a fan of the law. The more I know, the more harmful I think it will be for small businesses and costly for state governments and the federal government. It does nothing to address the cost of health care in our country. It only expands a broken system. That is why I have opposed it from the beginning and had hoped it would be successful in court and at the ballot box this year. Now we’re faced with the fact that the law remains, and it requires every state to participate in an insurance exchange. Our decision is whether the state or federal government should run it, and the deadline for that decision is Friday.”

“Since the Presidential election, we’ve received 800-plus pages of draft rules from the federal government, some of which actually limit state decisions about running an exchange more than we expected.” “In weighing all of the information we currently have, I informed the federal government today that Tennessee will not run a state-based exchange.” Haslam, however, has left the door slightly cracked open for future reconsideration on this issue. “If conditions warrant in the future and it makes sense at a later date for Tennessee to run the exchange, we would consider that as an option at the appropriate time.