Panel halts bill on health exchange

Virginia has put the brakes on legislative action to carry out federal health care reform.

Faced with opposition from Gov. Bob McDonnell and House Speaker William J. Howell, a state Senate subcommittee has bowed to the reality that no legislation will be approved in this General Assembly session to create a state exchange for health insurance benefits.

The subcommittee voted Wednesday to recommend carrying over legislation proposed by Del. John C. Watkins, R-Powhatan, to create a health benefits exchange as a new division of the State Corporation Commission.

But Watkins said the Senate Commerce and Labor Committee, of which he is chairman, will continue working on how to establish an exchange after the assembly adjourns next month.

"I think we're a long way from finished," he told the subcommittee, chaired by Sen. Jeffrey L. McWaters, R-Virginia Beach.

The bill recommended for carry-over is favored by many in the insurance industry but opposed by a coalition of consumer advocates, who say the SCC is the wrong place for an exchange that must be accessible to health care consumers looking for affordable coverage of individuals and small businesses.

Sen. Mark R. Herring, D-Loudoun, called the recommendation to place the exchange in the SCC "a huge mistake" because its formal, quasi-judicial structure would not be easy for consumers to access.

Herring, who favored two legislative proposals killed by the subcommittee Wednesday, also faulted the assembly for "abdicating" its responsibility to act in this session to create the framework of an exchange that must be certified by the federal government on Jan. 1.

As a result, he said, the state risks having a federally operated exchange being imposed on Virginia under the Patient Protection and Affordable Care Act.

"We need to create one that is right for Virginia," Herring said in an interview.

Herring voted against a subcommittee recommendation on Wednesday to kill legislation proposed by Sens. A. Donald McEachin, D-Henrico, Barbara A. Favola, D-Arlington, and Ralph S. Northam, D-Norfolk.

Both bills would have created an independent, quasi-governmental exchange similar to the Virginia Housing Development Authority, as recommended in September by McDonnell's Virginia Health Reform Initiative Advisory Council on an 11-3 vote.

However, the council's chairman, Secretary of Health and Human Resources Bill Hazel, urged the legislature not to act during this session on any legislation to create an exchange.

McDonnell said the legislature should wait until after the U.S. Supreme Court rules on the constitutionality of a key provision of the federal law, which the governor opposes.

Howell, R-Stafford, also opposed consideration of the issue in the House of Delegates, where a subcommittee tabled three proposals after a hearing last week.

The Senate took a different approach, with McWaters' subcommittee holding three extensive hearings on the issue before voting Wednesday.

The subcommittee decided ultimately to carry over Watkins' bill as a vehicle for further study and future action if the governor calls a special legislative session later this year, after the court rules on the federal law.

McWaters praised Watkins for leading on the issue, "perhaps going against other political forces to make sure we're ready."

McDonnell has said his administration has ample authority to continue planning for an exchange if one is ultimately required under the federal law.

But Herring faulted the governor for not acting on the advisory council's recommendations in this assembly session.

"It reflects a lack of leadership at the top," he said.