The news that the state will not set up its own health insurance exchange is good news for those who oppose the Affordable Care Act.

The Ohio Republican Party calls the move courageous.  Maurice Thompson with the 1851 Center, a group that staunchly opposes the federal health-care plan, says this means his group won’t have to sue the state.

“We’re very happy with the administration’s decision not to enter a state- based exchange because we were either going to have to file a lawsuit against the state if it entered one or against the federal government if they didn’t.”

Ohio Constitution vs. federal program
Thompson says his group will now put its effort into fighting the federal government.  Had Ohio set up an exchange, he says voters would have violated a state constitutional amendment that voters  passed last year.

“It would be triggering the mechanism that imposes the employer mandate which is forbidden under the Ohio Constitution,” Thomspon says.

He maintains that counters the argument that the federal policy pre-empts state policy. “The state of Ohio cannot use state resources to violate the state Constitution under any circumstances and under federal law, that’s exactly what they would be doing if they attempted to enact the state based exchange.

Thompson says the state-based exchange would have hurt Ohio businesses.

“They would have triggered the employer mandate and taxes where an Ohio employer who doesn’t sufficiently insure his employees as defined by Obamacare would be subject to tax penalties up to $3,000 per employee.  And that’s a tax on employing people and for Ohio, a state struggling with jobs, that’s just an impermissible burden on employment.”

There's still time
The group that’s been asking the state to set up its own exchange isn’t surprised by Kasich’s decision.  Col Owens co-chairs Ohio Consumers for Health Coverage says this decision does not tie Ohio’s hands in the future.

“The state can move to a state exchange and quite frankly I think they will.

His co-chair, Cathy Levine, agrees.  She actually thinks this might work out best for now.

“Given the lack of opportunity for consumer input at the state level and the administration’s resistance to the consumer protections, we are likely better off with a large federal role in Ohio’s exchange at this point.”

Levine says she thinks Ohio will come around on this issue.

“ There’s strong bipartisan support among stakeholders in Ohio for developing a state exchange with a public process.  I think this is the beginning and not the end as the implementation date nears or even passes.”

Levin says she’s not sure how significant the differences between a state and federal exchanges would be for most consumers, though the state can make improvements tailored to Ohioans

She notes the Kasich administration has been using its buying power with Medicaid to require managed-care plans to provide better outcomes at a lower price.  And  she’d like to see that kind of market power used in the exchange on behalf of consumers. 

Once lawmakers know what to expect in 2014, Levin says lawmakers will be more likely to set up their own exchange to give the state greater flexibility.