RICHMOND, Va. (Dec. 14, 2012) – The list continues to grow.

On Friday, Virginia Governor Bob McDonnell announced that his state will not create a state-run health insurance exchange under the Patient Protection and Affordable Care Act.

McDonnell, like many other republican governors rejecting exchanges, cited a lack of answers from the federal government to questions involving the costs, impacts and flexibility of the state-run exchanges.

“For months, Virginia has asked the Obama administration to provide clear guidance and comprehensive answers to important questions that would determine major components and financial impacts to the Commonwealth should we decide to run our own exchange,” Governor McDonnell said. “Originally, I asked that we begin the planning process to potentially operate a state-based exchange for Virginia, primarily so we would be in control of this process. However, despite repeated requests for information, we have not had any clear direction or answers from Washington until recent days, and we cannot conclude, as we review those materials, that we would have the control and flexibility needed to efficiently and effectively run our own state exchange

The Virginia governor did leave the door open to future cooperation. “We would like the ability to control our health insurance marketplace, and will continue dialogue with the federal government to clearly understand the logistics of this option before making a decision.”

Tenth Amendment Center executive director Michael Boldin pointed out that the Virginia governor doesn’t even have the authority to create an exchange under the Affordable Care Act, so the decision is moot.

“Governor McDonnell seems to have forgotten that he signed the Virginia Health Care Freedom Act on March 24, 2010, which prevents his state from running a health exchange under the Affordable Care Act. So while I applaud the end result, Virginians need to be extremely wary of a guy who seems to have no problem directly violating a major law he personally signed.”

From the text of the bill, Code of Virginia, Section 38.2-3430.1:1. Health insurance coverage not required.

No resident of this Commonwealth, regardless of whether he has or is eligible for health insurance coverage under any policy or program provided by or through his employer, or a plan sponsored by the Commonwealth or the federal government, shall be required to obtain or maintain a policy of individual insurance coverage except as required by a court or the Department of Social Services where an individual is named a party in a judicial or administrative proceeding. No provision of this title shall render a resident of this Commonwealth liable for any penalty, assessment, fee, or fine as a result of his failure to procure or obtain health insurance coverage.

Note: “to require” – in a legal sense – includes the levying of penalties or fines for noncompliance.

According to Michael Cannon of the CATO Institute, in order to operate an exchange, Virginia employees would have to determine eligibility for ObamaCare’s “premium assistance tax credits.” Those tax credits trigger penalties against employers (under the employer mandate) and residents (under the individual mandate). In addition, Virginia employees would have to determine whether employers’ health benefits are “affordable.” A negative determination results in fines against the employer. These are key functions of an exchange.

Ergo, if Virginia establishes an exchange, then that law would violate state law by indirectly compelling employers and individual residents to participate in a health care system. That sort of law seems precisely what the Virginia Health Care Freedom Act exists to prevent.

TAC Communications director Mike Maharrey weighed in on the fact that McDonnell and other governors have been making their decisions based on practical concerns, and not the Constitution.

“I would much rather see these guys take a principled, constitutional stand against Obamacare. It’s not hard. Clearly the Constitution contains no enumerated power giving the feds the authority to run a health care system for the entire United States,” he said. “But when it’s all said and done, doing the right thing for wishy-washy reasons still means the right thing gets done. Nearly half of the states refusing to set up these exchanges creates a real problem for the feds. This isn’t how the PPACA was supposed to work. This is not how they planned on this going down. Now it’s time for states to get more active in blocking implementation of this unconstitutional monstrosity. I believe the states have the power to halt it in its tracks.”

According to, Virginia brings the number of states refusing to set up an exchange to 23. Six states say they will enter into a state-federal partnership with 19 states (including Washington D.C.) opting to go along with the PPACA program and set up state-run exchanges.



1. Reject Exchanges – state legislation to block the implementation of state exchanges, even if your governor has moved forward with them.

2. Model PPACA nullification legislation, click HERE.

To track health care nullification efforts across the U.S., click HERE.

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