Bid to block health exchange in Tennessee following Supreme Court case seen as 'overkill'

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NASHVILLE, Tennessee — Some Republican lawmakers still reveling in the recent defeat of a proposal to expand Medicaid coverage to 280,000 low-income Tennesseans are now setting their sights on 230,000 people enrolled through the federal health insurance exchange.

State Sen. Brian Kelsey's latest proposal would ban Tennessee from creating a state-run exchange should the U.S. Supreme Court rule that the federal government can't pay subsidies in states that declined to set up their own insurance markets. For many Americans, the subsidies make the insurance affordable.

"I'm hopeful the plaintiffs will be successful in this case and it will blow up Obamacare," said Kelsey, R-Germantown.

Tennessee is among the 30 states — largely led by Republicans — that have declined to set up state-based systems and have exchanges run by the federal government instead. The bill represents an early effort to pre-empt efforts to cope with the fallout if the court rules the way many conservatives hope it will.

Oral arguments are scheduled for Wednesday, while the high court will likely take several weeks to release a decision.

Kelsey's proposal is getting pushback from Republican leaders, including Gov. Bill Haslam and state Senate Speaker Ron Ramsey.

"The concern is about tying the state's hands in the future to what may or may not be the right proposal," Haslam told reporters in Memphis on Thursday evening. "At the end of the day, I think good government is about making certain we provide the best alternatives possible."

Ramsey said he had spoken to Kelsey about his concerns about the bill, which he described as "overkill."

"You're passing legislation based on a Supreme Court decision that may or may not come down in June," the Blountville Republican said. "That's more of a political statement than it is good government."

Ramsey said it would be "a big problem" if those already covered through the exchange lost their insurance because of a state law, especially because he would expect the federal government to make it easy to create a state-run marketplace should it lose the legal challenge.

Kelsey also was a lead sponsor of last year's legislation dubbed the "Stop Obamacare Act" to require Haslam to seek legislative approval to expand Medicaid in Tennessee. Haslam called a special session in early February to take up his Insure Tennessee proposal, which would have had hospitals cover the $74 million state share to draw down $2.8 billion in federal money over the next two years.

But the measure failed amid widespread unease among Republicans about President Barack Obama's Affordable Care Act.

"We saw during the special session how short-sighted — and frankly reckless — the bill was last year," said Democratic state Sen. Jeff Yarbro of Nashville. "And engaging in this exchange stuff right now would be equally dangerous to the people of Tennessee."

House Democratic leader Craig Fitzhugh of Ripley said the Legislature should be taking steps to create a state exchange rather than seeking to ban one.

"This is crazy that we're going to deny health insurance to all these people because of the president," Fitzhugh said.

Kelsey said his proposal is aimed at eliminating penalties for individuals who don't want to buy health insurance and for businesses that don't offer coverage. He said he was open to exploring options of allowing Tennesseans to buy insurance from other states' exchanges if his bill passes.

But Kelsey said he hopes that if the Supreme Court rules in favor of the plaintiffs, it "will be a significant enough blow against Obamacare that it will require Congress to act to replace it."


Associated Press writer Adrian Sainz contributed to this report from Memphis.

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