Mississippi Insurance Commissioner Mike Chaney, who has been the driving force behind the creation of a state-based exchange, got his answer from the feds: Sure can't.
The U.S. Department of Health and Human Services rejected the plan Thursday, making Mississippi the only state to have its exchange blueprint nixed by the federal government.
Instead, Mississippi will have a federal exchange, just like more than two dozen other states that balked at implementing the health law provision on their own.
The decision follows more than a month of delay from the federal government over the future of Mississippi's proposal. Chaney pushed ahead even though Mississippi Gov. Phil Bryant opposed a state-based exchange.
That infighting proved to be a big problem. The federal government said the split between Chaney and Bryant is at the heart of its decision.
Chaney began building the exchange in Mississippi based on his authority to run the state's high-risk insurance pool. One problem with that approach: It has nothing to do with Medicaid, only subsidized private insurance.
Chaney said the state had take the federal agencies overseeing the exchanges at face value. "But I fear that we have been unable to trust them at this point. And Americans need to be able to trust their government. I feel that I have been betrayed at this point," he said during a news conference Thursday evening.
The Affordable Care Act says that the exchanges have to be one-stop shops for both private insurance and Medicaid. As insurance commissioner, Chaney doesn't have authority over Mississippi's complicated Medicaid enrollment processes.
Gov. Bryant sent letters to HHS expressing his opposition to state-based exchanges and questioning the commissioner's legal authority to run one. Chaney insisted he had the authority and was backed up in a ruling by the state's Democratic attorney general.
In a statement, Bryant praised the ruling from the federal government. "I have said repeatedly that the health insurance exchanges mandated by Obamacare are not free-market exchanges," he said. "Instead, they are a portal to a massive and unaffordable new federal entitlement program. They trigger new taxes on businesses and will ultimately drive more people onto Medicaid rolls. I firmly maintain my position that Mississippi will not willfully implement a mechanism that will compromise our state's financial stability," Bryant said.
Mississippi would have been the only Republican-led state in the South with a health insurance exchange no run by the feds.
But a spokesman for HHS said the state's approach wasn't feasible. "With the Governor's refusal to work with us or the insurance commissioner, there is no way to coordinate strategy with other agencies that he's in charge of," an HHS spokesman told KHN.
Work has been underway on an insurance exchange for years, and Chaney isn't sure what will become of it. The Web portal for the state's exchange already exists at OneMississippi.com.
The commissioner is leaving the door open for Mississippi to run a state-based exchange exclusively for small businesses. HHS wants Mississippi to consider a partnership.
"Given the work the insurance department has done, Mississippi is an excellent candidate for a state partnership marketplace. We encourage Mississippi to apply to operate parts of its marketplace by the February 15, 2013 deadline," the HHS spokesman said.
This story is part of a collaboration that includes Mississippi Public Radio, NPR and Kaiser Health News.
Phil Galewitz contributed to this report.