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Tennessee Gov. Bill Haslam

NASHVILLE -- Republican Gov. Bill Haslam said Tuesday his struggle over whether to create a state-based insurance exchange under the federal health care law has everything to do with getting to the "right answer" and not politics.

Tea party activists are expected to rally today against the state setting up its own Internet marketplace to help lower-income residents find insurance and let the federal government do it instead.

"We literally are trying to do our homework the very best we can," Haslam told Nashville Republican activists at their First Tuesday luncheon.

He complained that the Obama administration has not made that easy, noting "when we get 373 pages of regulations just this past Friday, we're trying to figure out what the right answer is for Tennessee."

"The easy political answer is just to say no, we're not doing a state-based exchange because it's the easiest answer," Haslam said.

Tennessee is one of just 10 states where governors have yet to make a decision on whether to proceed with a state-based exchange or let the federal government set it up. States have until a week from this Friday to decide.

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Haslam later told reporters he believes Tennessee is better positioned than most states to make an informed decision based on its experiences with TennCare, the state's expanded version of Medicaid, and its dealing with the managed care companies that provide coverage for some 1.1 million low-income, disabled or elderly residents.

But, Haslam said, "if we run a state-based exchange, we have to know there's a real flexibility, it really is a state-based exchange and we have some authority over key decisions."

"The other side is we have to understand if we do that are they [Obama administration] organized enough to really have the interchange that you need to have between a state-based exchange and a federally run program."

A number of Republican state lawmakers are against the state exchange and Haslam acknowledges winning approval in the GOP-led General Assembly won't be easy.

Meanwhile, members of the Tennessee Freedom Coalition plan to rally today against the state setting up its own exchange today at the state Capitol.

"This exchange presents a nightmare for our state, allowing our federal government even more involvement in how we run our state," the group's chairman, Andy Miller, said in a statement.

Miller said "we are asking Governor Haslam to stand with us against this legislation and push back against the continually growing federal beast."

Haslam said he has no problem with the rally, noting, "hey that's the way democracy works. They should get to do that. I would hope that they would do the work. There are a lot of folks that think, 'Oh, we can just say no to an exchange.' And we can't."

That's because the federal government would move to set it up, the governor noted.

"I mean, there's going to be an exchange in Tennessee and a lot of people who think this is going to cost us a lot of money in the state -- it's not going to cost us any more than the federal exchange."

In fact, he said, he believes Tennessee can run the exchange more cheaply than the federal government -- provided the state gets flexibility. That would "probably" save money for Tennesseans who participate in the exchange and whose payments would also provide funding to run it.

Desjarlais on Exchange

Earlier Tuesday, embattled U.S. Rep. Scott DesJarlais, R-Tenn., who is trying to move beyond a personal scandal that has at least four Republicans weighing election challenges to him in 2014, argued in an opinion piece that Tennessee should not create its own exchange.

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Tennessee Congressman Scott DesJarlais

"While simply choosing to forgo setting up a state-run exchange will not prevent 'Obamacare' from coming to Tennessee, I believe there are several reasons why we should refrain from setting up an exchange," the physician said.

He cited the "sheer logistical nightmare" of having to "redevelop our state's market" as well as costs to the state. President Barack Obama and Democrats assumed states would "jump at the chance" to set up their own exchanges if the federal government provided funds to let them do so.

But DesJarlais maintained that "as written, the law only allows state-run exchanges to offer insurance subsidies and to tax employers for failing to provide health insurance."

He argued that federally run exchanges can do neither. So, DesJarlais said, "the Obama administration blatantly abused its rule-making power and circumvented Congress to rewrite the law by issuing an IRS rule granting federally run exchanges the same powers as state ones."

Haslam said that debate "will work it's way through the courts. ... In the meantime, I think we have to make a decision."

Contact staff writer Andy Sher at or 615-255-0550.