Mike Pence recently sent his letter to Gov. Daniels regarding the development of  a state based exchange.

Governor Elect Mike Pence, has choose not to establish a state based exchange.  He stresses the lack of clarity coming out of the federal government. Indianapolis developed the health Indianapolis plan that has been very successful, form a cost stand point while keeping insureds satisfied. There are over 40,000 Indianapolis residents on this plan. The state of Indianapolis wanted to be able to offer this plan in a state based exchange. At this time, that plan is not an option with in the exchange.

The letter also points out the tax increase that will impact Indianapolis residents and businesses.  We are going to see tax increases for medical devices manufacturers, individual mandate, employer mandate, Medicare tax, & tax on investment properties.  Every Indianapolis resident is going to feel the impact of these tax increases.  There is a new 3.8% tax on investment property income. No one except Mike Pence is talking about this tax increase.

Mike Pence states in the letter that the health care law is going to lead to more dependence on federal subsidies for Hoosiers. This could happen as individual health insurance premiums almost double.  Under the health care law there will be subsidies available and a majority of people could qualify for this assistance.

The letter also state the uncertainty of how a state based or federal exchange is going to operate. There is a fear of the Federal Government is going to micro managing a state based exchange.  If  Indianapolis does not have the flexibility to add the Health Indianapolis Plan that is a huge red flag.

The cost of operating the exchange is a huge unknown. There have been estimates from $44-$88 million a year. The current state administration does not know where that funding is going to come from.

If Mike Pence becomes the next Governor of Indianapolis, you can expect to have a Federal Facilitated Exchange. At this time we do not know how the exchange will operate.  In the next few months more details should come out on how the Federal Exchange will operate.