Arizona governor rejects state-based insurance exchange

Arizona Gov. Jan Brewer is the latest Republican to reject a state-based insurance exchange under President Obama's healthcare law.

Brewer joins a slew of high-profile GOP governors who have said their states won't establish state-run exchanges, instead leaving the task up to the federal government.

“This has been one of the more difficult decisions of my career in public service," Brewer said in a statement Wednesday, in which she said she had notified the Health and Human Services Department of her decision.

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Republican governors are under pressure from conservatives to reject state-based exchanges. They hope pushing the task to HHS will strain federal resources, a potential avenue to chip away at the Affordable Care Act without repealing it outright.

But that strategy comes with practical risks. It gives the federal government more control over states' healthcare marketplaces, allowing the Obama administration to make key decisions about how to regulate insurance plans sold to small businesses and individuals. 

Brewer said she carefully weighed both of those imperatives  — a contrast to other GOP governors, including Ohio's John Kasich, who have made it sound like exchanges simply won't happen in their states.

"Though I am a steady advocate of local control, I have come to the conclusion that the State of Arizona would wield little actual authority over its ‘state’ Exchange," Brewer said. "The federal government would maintain oversight and control over virtually every aspect of our Exchange, limiting our ability to meet the unique needs of Arizonans and the Arizona insurance market."

She said a state-based exchange would be too costly, even though the federal government would repay start-up costs, and that she does not have enough information about the structure of a federally run fallback versus a state-based system.

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