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The Associated Press April 14, 2011, 5:55PM ET

OK gov turns down insurance exchange federal grant

Gov. Mary Fallin reversed course Thursday by rejecting a $54.6 million federal grant to help create a health insurance exchange for uninsured Oklahoma residents that is required by the new federal health care law.

The Republican, who previously said she would accept the money, said legislative leaders have agreed to consider using state and private funds to create the Health Insurance Private Enterprise Network. The program will identify private health insurance plans offered in Oklahoma, what they cover and how much they cost.

Fallin made the announcement two weeks after Senate President Pro Tem Brian Bingman, R-Sapulpa, said members of the Senate's Republican majority objected to the Early Innovator Grant, which was awarded to the state in February. The Senate refused to consider a House-passed bill to create an advisory board to help implement the insurance exchange.

Bingman said accepting the grant could lead the state into a "trap" of complying with the federal health care overhaul, which is opposed Republicans who hold majorities in both the state House and Senate.

Fallin, a former congresswoman who became governor in January, said she also opposes the federal law that "was pushed down upon our states." Fallin has said she voted against the health care bill pushed by Democratic President Barack Obama while in Congress and supports a lawsuit filed by Oklahoma Attorney General Scott Pruitt in January that challenges the law's constitutionality.

"We all support the repeal and the replacement of the federal health care bill. We do believe it is unconstitutional," Fallin said at a Capitol news conference flanked by Bingman, House Speaker Kris Steele, R-Shawnee, and other Republican lawmakers.

But the governor said that until the law is repealed or struck down by the courts, "it is the law of the land." It requires that a health insurance exchange be in place by 2013 or the government will step in and create its own.

"We believe that an Oklahoma network is good public policy," Fallin said.

Bingman and Steele said they support the governor's proposal.

"We're all opposed to the federal health care plan. We're going to take care of our own problems," Bingman said.

"This is really about Oklahoma," added Steele, who said 18 percent of Oklahomans have no health care coverage and the exchange will outline their health care options.

New Republican Insurance Commissioner John Doak praised Fallin's action and said he was returning a $1 million federal health care grant. The grant was accepted by former Democratic Commissioner Kim Holland in August to conduct health insurance premium rate reviews to identify unjustified and excessive rate increases.

"This is a fulfillment of my campaign promise to oppose Obamacare every way I could," Doak said. "I remain deeply committed to a free-market system that relies on licensed agents and brokers as the frontline of consumer protection."

Fallin noted that legislation adopted by state lawmakers in 2009, before the federal health care law was passed, authorized a health insurance exchange to help reduce the state's uninsured population. It was part of the Insure Oklahoma premium assistance program, a public-private partnership that helps small businesses provide health care coverage for their low- and middle-income workers.

To meet the new federal guidelines for a health insurance exchange, GOP lawmakers plan to file legislation in the House that would create a seven-member advisory board of representatives of health insurers, health care providers, employers and consumers.

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