The bill to set up a health insurance exchange in Colorado passed out of the state Senate today (Mon 4/25/11). It's a bi-partisan bill, but Republicans were the only ones to argue against it. Conservatives worry that setting up a state exchange will advance the goals of the federal Affordable Care Act, which they want replealed. The bill's sponsors say Colorado needs an exchange whether or not the federal health law stays in place. Colorado Public Radio Health Reporter Eric Whitney has more.

WHITNEY: The big, overarching goal of a health insurance exchange is one everyone agrees on: To keep the price of health insurance from going up so much every year. Backers say an exchange will be a re-organized marketplace where people will have more choices, and more competition will keep prices in check.
Republican Senator Shawn Mitchell isn't buying it.

MITCHELL: if government could create a market in health care, it wouldn't have messed up the current market that we all live in so badly. What this is is a government solution to government problems.

WHITNEY: Mitchell and other conservatives worry that because the year-old federal health law, the Affordable Care Act, calls on states to set up exchanges, that if Colorado does, it will be inviting more federal control.
But the bill's sponsors disagree. Republican Representative Amy Stephens says Colorado can set up its own exchange outside the federal health law. Senate sponsor Betty Boyd, a Democrat, says that's true. But, Boyd says, Colorado's exchange would also work with the federal law. That law aims to start giving lower-income Americans subsidies to buy health insurance starting in 2014.

BOYD: We see this exchange as something that could well stand alone, whether those subsidies are forthcoming or not.

WHITNEY: Senator Mitchell offered a couple of amendments to try to keep that from happening. The first said Colorado can only set up an exchange if the governor will seek a waiver letting Colorado opt-out of Affordable Care Act . The other would have barred Colorado from seeking, accepting or spending any federal money for an exchange. Both ideas were voted down.

SOUND: SENATE VOICE VOTE: All those in favor say aye, aye, those opposed nay, nay. Amendment 14 fails.

WHITNEY: So now that the bill is headed for the House, the big question is whether Representative Stephens will modify it to accomplish Senator Mitchell's goals.
Stephens previously asked a Senate committee to do that, the committee declined. Speaking a couple of weeks ago, Stephens says she hasn't necessarily given up on the idea.

STEPHENS: we may re-write parts of it, I think saying the same thing, just in a different way.

WHITNEY: Democrats say that's a deal-killer for them. Meaning that if the House passes an exchange bill that says Colorado must opt-out of the federal health law, the Democratically-controlled Senate won't go along.
Governor Hickenlooper has been trying to get the House and Senate to come to agreement on an exchange bill, but if they can't, he has the power to set up an exchange on his own by executive order. The governor says he doesn't want to do that.

HICKENLOOPER: If I create it, it's not going to have the same strength as if it's created through legislation.

WHITNEY: The state legislature only has three more weeks to create an exchange through legislation. Backers say the state should do it this year so it has time to set one up by the federal deadline of 2013. States that don't set up their own exchanges by then face the prospect of having the federal government set one up for them. That's something Republicans and Democrats say they want to avoid.