INDIANAPOLIS, Ind. (Nov. 15, 2012) – Indiana Governor-elect Mike Pence announced today that he would not move forward with setting up a state insurance exchange in pursuance of the Patient Protection and Affordable Care Act.

Pence made his position known in a letter to current Gov. Mitch Daniels.

“I do not believe the State of Indiana should establish a state-based health insurance exchange because doing so will cost taxpayers millions of dollars and it is not clear that Hoosiers would benefit from incurring the cost of implementing this new federal healthcare bureaucracy. Without knowing more details on the cost and nature of state-based exchanges, it is possible that our state could be placed in the untenable position of serving as the administrator of a new federal healthcare bureaucracy over which we have little control.”

Pence estimates that creating the exchange would cost the state $50 million per year.

“Despite this investment, there is no evidence that such an exchange would benefit Hoosiers, give us significantly more control over our healthcare choices or lower the cost of insurance premiums. In fact, the State’s actuaries are predicting significant premium increases for the individual and small group market, regardless of whether the State or federal government operates an exchange. In addition to uncertainty about costs and benefits, there are legal uncertainties such as whether the employer tax penalty even applies to businesses in the absence of a state-based exchange.”

The governor-elect also made it clear he opposes entering into a partnership with the federal government to run an exchange. He said he plans to inform federal authorities  of his decision by the Feb. 16 deadline for making a decision on a partnership.

Pence joins a growing list of state governors who have indicated they will not establish exchanges under the PPACA.

“This is a good first step,” Tenth Amendment Center communications director Mike Maharrey said. “The feds depend on state cooperation to make these huge programs work. If a large number of states refuse to set these exchanges up, it puts and increasing burden on the federal bureaucracy, one I’m not convinced they are really prepared to deal with. It will definitely gum up the works, and it sets the stage for more aggressive state action to block implementation of this unconstitutional act.”

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