Missouri state representative Chris Molendorp filed a bill last session to set up a health insurance exchange. HB 609 was passed unanimously by the House and by the Senate committee it was assigned to. It was never brought to the floor of the Senate. Why? Sen. Jane Cunningham said it was because she actually read the bill and was shocked at what it contained.

In 2010, Sen. Cunningham sponsored the Health Care Freedom Act, a referendum that sought to protect Missourians from the now infamous ‘individual mandate.’ The Act was placed on the ballot in August 2010 as Proposition C; the first time any Americans got to vote on the measure and they passed it with 71% of the vote. (Full disclosure: I managed the campaign to pass Prop C.)

Cunningham read HB 609 to basically gut everything passed by the voters of Missouri in Prop C. Specifically, it yielded authority to the Department of Health and Human Services in Washington, DC 46 different times. Beverly Gossage provides a substantive case against insurance exchanges in The Missouri Record, and in it she draws attention to a statement by Micheal Cannon of the CATO Institute:

I am continually surprised by how many people around the country mistakenly believe the new law requires states to create an Exchange. The authors of the law knew full well that such a requirement would be unconstitutional. Instead, the law asks states to do the heavy lifting of creating these bureaucracies, offers them considerable sums of money, and as a fallback position allows the federal government to create an Exchange if a state declines to do so.

Appearing before the Senate Interim Committee on Health Insurance Exchanges, Director of the Missouri Department of Insurance, John Huff, testified several times that problems with the federal exchanges could be fixed if Missouri took the initiative (and the federal grant money) and just designed its own exchange. Otherwise, he feared, Washington would just force us into a one-size-fits-all exchange.

Or not.

We learn from POLITICO that,

A quirk in the Affordable Care Act is that while it gives HHS the authority to create a federal exchange for states that don’t set up their own, it doesn’t actually provide any funding to do so. By contrast, the law appropriates essentially unlimited sums for helping states create their own exchanges.

In other words, if states do not set up their own exchange, the feds have no money to do it themselves.

Already Kansas and Oklahoma have given back their federal grants intended for state based exchanges. Florida and Louisiana have stated they will not set up an exchange at all.

Given the overwhelming vote that Prop C received last year, Missouri legislators would be well advised to tread lightly around paving the way for an individual mandate that was flatly rejected at the polls. The specter of a federal exchange if we fail to act doesn’t seem so scary anymore.