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By W. Gardner Selby June 1, 2015

Abbott call to bar state government from setting up Obamacare exchange not passed into law

As a candidate, Greg Abbott made it clear he wanted to forbid state government from setting up a marketplace (or exchange) enabling Texans to buy health insurance in keeping with the 2010 Obamacare law.

The federal act requires most Americans to obtain coverage. Texas, like a number of states, relies on a federally run online marketplace to vend insurance policies to residents, many of whom have qualified for payment subsidies.

Abbott's rationale for seeking a state law barring the state from setting up a marketplace was both to keep Texas businesses from being subject to federal financial penalties for not providing health coverage to employees and to protect individuals who fail to get insured from related fines, according to his campaign roster of promises.

With the 2015 legislative session nearly over, we've spotted no indication of lawmakers carrying out this promise, though John Colyandro of the Texas Conservative Coalition Research Institute helped us spot a proposal by Rep. J.D. Sheffield, R-Gatesville, in line with the promise. House Bill 2782, which Sheffield, a physician, filed in March 2015, says an exchange "may not be established in this state." His measure was referred to a House panel, according to legislative records, but there was no further action.

On the other hand, proposals by Democratic Rep. Chris Turner of Grand Prairie to set up a state-run Obamacare marketplace did not catch on, neither one getting a hearing. That is, there was no sign the Republican-controlled Legislature was warming up to creating a state-steered exchange.

In February 2015, a Texas Tribune news story quoted an Abbott spokesman declining to say whether Abbott opposed creation of a state exchange. The topic came up because a lawsuit supported by the Republican-led state could have the effect of cutting off Obamacare subsidies for health coverage to nearly 1 million Texas beneficiaries--if the U.S. Supreme Court says IRS regulations were written in a way that allows the subsidies only if they're given through state-established exchanges.

The Tribune quoted Abbott spokesman John Wittman saying: "This lawsuit highlights more evidence that Obamacare is a broken law that is bad for patients, doctors and taxpayers. Gov. Abbott believes that Texas should be able to address our unique health care situation without federal interference, putting patients and doctors in charge of health care decisions."

By email, we asked Wittman about Abbott's desire to bar the state from setting up an Obamacare exchange and didn't hear back.

Bee Moorhead of Texas Impact, an interfaith legislative advocacy network, predicted by phone that if the Supreme Court effectively cuts off subsidies to Americans not purchasing coverage through state-run exchanges, Abbott won't call lawmakers into a special session to address the issue. Texans subject to losing the subsidies "will just be screwed," she speculated.

Separately, Colyandro suggested Congress would find a way to extend subsidies in Texas and other states that don't have state-established exchanges. Colyandro, who was director of policy in Abbott's campaign, speculated too the 2017 Legislature could then "put the matter to rest" and fulfill the governor's call to bar a state-run Texas exchange.

We're marking this an Abbott PROMISE BROKEN.

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