Perry officially rejects Texas insurance exchange

Gov. Rick Perry sent a letter to Health and Human Services Commissioner Kathleen Sebelius on Thursday that Washington will have to set up the exchange instead. Gov. Rick Perry sent a letter to Health and Human Services Commissioner Kathleen Sebelius on Thursday that Washington will have to set up the exchange instead. Photo: Edward A. Ornelas, San Antonio Express-News Photo: Edward A. Ornelas, San Antonio Express-News Image 1 of / 1 Caption Close Perry officially rejects Texas insurance exchange 1 / 1 Back to Gallery

AUSTIN - Texas Gov. Rick Perry officially notified the federal government on Thursday that the state will not set up an exchange to help people buy health insurance.

Perry sent the letter to Health and Human Services Secretary Kathleen Sebelius a day before the deadline to let Washington know that the state will not set up its own exchange. President Barack Obama's administration gave states the option of setting up their own exchanges, partnering with the federal government or letting Washington do it.

The health insurance exchanges are required under the Affordable Care Act. They give people without insurance an online market place to buy health insurance that suits them. People with low incomes and special needs will get subsidized insurance when the exchanges begin operating in October 2013.

Perry opposes the federal health care law that is the signature accomplishment of Obama's first term. The former Republican presidential candidate contends the law is federal overreach and opposes the rules it places on states to make sure nearly all Americans have health-care coverage.

"This is a federally-mandated exchange with rules dictated by Washington," Perry's letter said. "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."

Perry always has emphasized states' rights and chafed at federal laws that require a certain level of spending on state health care programs. He has also rejected a provision of the law that would provide federal funds for states to expand the number of people covered by Medicaid, the government health care program for the poor, elderly and disabled.

Texas has the largest proportion of citizens in the nation without health care at about 25 percent, or 6.2 million people. Democrats in the Texas Legislature have urged the Republican majority to reconsider their opposition in order to get more Texans insured.

While Republicans fiercely oppose the law, some red-state governors chose to set up their own exchanges in order to maintain some local control of them.

In Mississippi, Republican insurance commissioner Mike Chaney formally notified Washington on Wednesday that his agency will proceed with a state-run exchange. Chaney says he wishes the law could be repealed, but he worries that "if you default to the federal government, you forever give the keys to the state's health insurance market to the federal government."