Executive Order Could Give Christie the Online Health Insurance Exchange He Wants

When Gov. Chris Christie earlier this month vetoed a bill to create the online health insurance exchange mandated by the federal Affordable Care Act, he cited the impending U.S. Supreme Court ruling on the ACA's constitutionality as one reason for his veto.

The governor also raised significant objections to the bill itself. If the ACA is upheld by the court in a ruling expected in June, the Legislature could go back and try to hammer out a compromise bill that Christie is willing to sign.

But the governor has another option: if the court upholds the ACA, Christie could bypass the Legislature and create an exchange by executive order.

When asked if an executive order is among the options under consideration, state Department of Banking and Insurance spokesman Marshall McKnight referred to Christie's veto message. McKnight said the message "notes that appropriate steps are being taken to allow the state to comply with federal mandates, once the legal landscape becomes clear, including the evaluation of all appropriate avenues to comply with if and when needed."

The governors of Rhode Island and New York have both issued executive orders to create their state exchanges, which under the ACA have to be ready to provide health insurance on January 1, 2014. Democratic New York Gov. Andrew Cuomo issued an executive order in April, after the Republic majority in the state senate refused for nearly a year to consider exchange legislation.

Sen. Joseph F. Vitale (D-Middlesex), chairman of the Senate health committee and co-sponsor of the exchange bill, has publicly raised the possibility that Christie might go the executive order route to get the kind of exchange he wants.

Vitale said that an executive order is not the best option, considering that several legislative leaders have devoted more than a year to crafting exchange legislation: "These are serious policy makers who want to participate in the legislative process."

But Christie's veto message made it clear he has major problems with the exchange bill produced by the Democrat-controlled legislature. The governor pointed out that the exchange governing board lacks representation by all stakeholders: the bill specifically bars insurance industry officials from serving on the board, and prevents them from returning to the industry for two years after they leave the board. The bill also gives the board some latitude to vet health plans sold on the exchange, which the governor said could reduce options and increase costs. And Christie pointed out that the bill requires New Jersey to create a federally subsidized, basic health plan for individuals just over the Medicaid threshold, although there is no certainty that federal funds would cover the costs of that plan.

Seton Hall Law School Professor John V. Jacobi said the governor could create an exchange by executive order if he chooses to. "But given the fact that the governor in his veto message indicated that he intends to comply with federal law if the Supreme Court upholds the statute, and given the fact that the legislature is clearly interested in creating an exchange, I think that an executive order is likely to be sort of a last resort for the governor."

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