Ky. legislature tries to block office space for healthcare exchange

State lawmakers in Kentucky tried a new way to thwart the implementation of President Obama's healthcare law: blocking the state from renting office space for new healthcare employees.

Kentucky Gov. Steve Beshear (D) signed an executive order Tuesday to create an insurance exchange — a state-based marketplace where individuals and small businesses can buy coverage, usually with a subsidy from the federal government.

But Republicans in the state legislature rejected funding to rent offices for the exchange, the Lexington Herald-Leader reported. The Secretary of the Finance Cabinet, Lori Flanery, will have to authorize the lease instead.

The state's Capital Projects and Bond Oversight Committee voted 3-4, along partisan lines, to block the roughly $295,000 it would cost to rent offices for 210 exchange employees, according to the Herald-Leader.

In a statement, Beshear repeated his support for state control of the insurance exchange. 

"As all our legislators know, if Kentucky doesn’t run the health benefits exchange, the federal government will operate it," he said. "Multiple stakeholders ... have told us loudly and clearly that they don’t want the federal government running this program. I agree with their judgment."

He added, "In order to make sure that we don’t fall behind on implementation and run the risk of a federal takeover of our health benefits exchange, the Secretary of the Finance Cabinet will sign the lease, as the Secretary has the authority to do."

Republicans in several state legislatures have blocked efforts to create state-based exchanges, and Beshear isn't the first governor to resort to an executive order to get an exchange off the ground. Trying to block office space for an exchange, though, is a new illustration of just how deeply Republicans' opposition to the healthcare law runs.

The Herald-Leader reported that one conservative lawmaker "said he could not support the rental lease because he was reluctant to put his name on anything related to what he called 'Obamacare.'"

—This post was updated Wednesday at 1:34 p.m.