Christie Vetoes Health Exchange!
This afternoon Governor Christie vetoed the Obamacare Health Exchange law in New Jersey. He cited the unknown Federal regulations and unknown costs associated with the law. Conservatives from every corner of the state have been very active over the past several weeks in urging this action by the Governor. He should be commended for the Veto he issued this afternoon!
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Here is the text of Governor Christie’s Veto message to the New Jersey Senate:
December 6, 2012
SENATE BILL NO. 2135
To the Senate:
Pursuant to the Patient Protection and Affordable Care Act, a
“health insurance exchange” must be established in each state either
by the government of that state or by the federal government. To carry
out this provision, the “Affordable Care Act” allows states the choice
between three Health Insurance Exchange options: a “State-based
Exchange”; a “Partnership Exchange”; or a “Federally Facilitated
Exchange.” Any state that does not select a State-based Exchange or
Partnership Exchange, or does not inform the federal government of a
selection, will be placed into a Federally Facilitated Exchange.
Senate Bill No. 2135, passed by the Legislature on October 18 of
this year, seeks to establish a State-based Exchange in New Jersey.
While I appreciate the Legislature’s attempt to craft a bill to
implement this portion of the “Affordable Care Act,” I cannot agree
that this codification of a State-based Exchange is the most
responsible selection for New Jersey. The federal government has
directed states to decide whether to establish a State-based Exchange
for calendar year 2014 by December 14, 2012, just over a week from
now, but New Jersey and all other states still await substantial
federal guidance on the functioning of all three types of Exchanges.
To be sure, the decision of whether to move forward with a State-based
Exchange can only be fully understood when competitively compared to
the overall value of the other options.
For example, while we know that both a Federally Facilitated
Exchange and a Partnership Exchange would be financed through “user
fees” paid by insurers, only late last week did the federal government
finally offer a preliminary glimpse as to what those costs might
include. And this latest proposal — which is neither final nor
comprehensive — raises more questions than it answers. For example,
further clarification is still needed on whether the federal
government intends to share user-fee revenue with the states in a
Moreover, New Jersey still requires guidance on the operation of
a Federally Facilitated Exchange. The federal government has yet to
present a structured blueprint for the design and operation of a
Federally Facilitated Exchange and the technical details for its
linkage to each state. This uncertainty regarding the potential
operation of Partnership Exchanges and Federally Facilitated Exchanges
necessarily clouds the analysis of whether a State-based Exchange
would be the best option of the three for New Jersey.
Lastly, financing the building and implementation of a Statebased
Exchange would be an extraordinarily costly endeavor. As
drafted, Senate Bill No. 2135 would create an expensive new
bureaucracy. While the federal government has enabled states to apply
for grant funding to cover some of the initial costs of such an
endeavor, the total price for such a program has never been
quantified, and is likely to be onerous. Without knowing the full
scope of which Exchange option would be most beneficial and cost
efficient for New Jerseyans, it would be irresponsible to force such a
bill on our citizens.
In addition to those and other known questions, the last several
weeks have triggered an apparent restart of proposed federal
regulations relating to the “Affordable Care Act,” and new guidance
continues to trickle out of Washington at an erratic pace. While
additional federal direction is welcome, there is no clear indication
now of what new rules and guidance will be released, or when that
crucial information will be provided. States deserve a predictable
plan for future federal rulemaking on the “Affordable Care Act.”
Without clear answers to basic questions, it would be imprudent for
New Jersey to implement a State-based Exchange at this time.
My decision today should not be interpreted as foreclosing future
consideration on this matter. In fact, the federal government has
provided states with the flexibility to amend their Exchange selection
in subsequent years. Moving forward, I welcome further guidance from
the federal government so that New Jersey can make a fully informed
decision as to the best course of action for our residents and
In short, I will not ask New Jerseyans to commit today to a
State-based Exchange when the federal government cannot tell us what
it will cost, how that cost compares to our other options, and how
much control they will give the states over this state-financed
option. We will comply with the “Affordable Care Act,” but only in
the most efficient and cost effective way for New Jersey taxpayers.
Until the federal government gives us all the necessary information,
any other action than this would be fiscally irresponsible.
Accordingly, pursuant to Article V, Section I, Paragraph 14 of
the New Jersey Constitution, I am returning Senate Bill No. 2135
(First Reprint) without my approval.
/s/ Chris Christie
/s/ Charles B. McKenna
Chief Counsel to the Governor