Gov. Chris Christie on Thursday vetoed legislation that would set up a state health insurance exchange as part of President Barack Obama's health care overhaul, saying the state shouldn't rush to enact such a law and possibly create new burdens on taxpayers while the constitutionality of the federal act remains to be decided.
"Because it is not known whether the Affordable Care Act will remain, in whole or in part, it would be imprudent for New Jersey to create an exchange at this moment in time before critical threshold issues are decided with finality by the court," the Republican governor said in announcing his veto.
The state legislation would have established an online marketplace for the middle-class to buy federally subsidized health plans starting in 2014.
The governor said he intends "to fully oversee New Jersey's compliance in a responsible and cost-effective way" if the U.S. Supreme Court upholds the overhaul. A decision is expected in June.
Democratic Assemblyman Herb Conaway, a lead sponsor of New Jersey's bill and himself a doctor, said the governor had put "national political pressures ahead of the well-being of New Jersey."
Christie has become one of the nation's most high-profile Republican governors and was courted as a potential presidential candidate. After declaring he wouldn't seek the nomination, he threw his support behind Mitt Romney, and is still considered a possible vice presidential candidate, though he has said he probably wouldn't be a good fit for that position. Romney said he would repeal the health care law if elected
U.S. Rep. Frank Pallone Jr., a Democrat who helped write the health care law, said Christie's veto would unnecessarily delay New Jersey's implementation of a key part of it.
In his veto message, the governor said he was concerned "that a hastily created exchange in New Jersey will impose unnecessary obligations upon the state's taxpayers." But he also said his administration will continue preparations begun two years ago to implement the law should it stand.
Christie is only the second governor to veto legislation establishing a state insurance exchange.
In New Mexico, GOP Gov. Susana Martinez vetoed a bill last year that would have set up an exchange, citing cost concerns and legal challenges to the federal law. For a while, it looked as if Martinez would move ahead on her own authority, and her administration accepted a $34 million federal grant to lay the groundwork for a state insurance exchange. But progress slowed to a crawl this year, and the director of the state's health reform office resigned in March.
The Obama administration refused to address Christie's veto directly. Health and Human Services spokeswoman Erin Shields said the administration is confident New Jersey residents will have access to a health insurance exchange on Jan. 1, 2014, as called for in the federal law.
At least 10 states have passed bills to set up insurance exchanges, and two, New York and Rhode Island, have done so through executive orders, according to the National Conference of State Legislatures. More than a dozen other states have legislation pending.
The states are all in various stages of preparation for the overhaul.
The exchanges represent half of the president's strategy for expanding coverage to more than 30 million uninsured people, including 1.3 million in New Jersey. Low-income people would be covered through expanded Medicaid programs.
Christie's decision "is consistent with what a lot of other states have done, which is to take a wait-and-see approach," said Sabrina Corlette, who directs research on insurance issues at Georgetown University's health policy institute in Washington.
"Unfortunately for New Jersey, assuming the Supreme Court upholds the law, the veto will make it more difficult for them to (set up) their exchange, since there would be much less time to do it," she said.
States have a Jan. 1, 2013 deadline for Washington to approve their plans for the new health insurance markets, or else the federal government can come in and run things.
Christie said the legislation he vetoed would have committed the state to operating a Medicaid-like program without assurance enough federal funds would be available to support the plan and limited the pool of plan participants as a result of its certification provisions, likely increasing costs. He also complained about the $50,000 salaries the bill would have provided those who serve on the exchange's board of directors.
Because of all the uncertainties, the governor said, it is impossible to know whether the bill "best suits the interests and needs of all New Jerseyans who will be required to finance these policy choices."
Starting in 2014, the federal law as now written requires most Americans to obtain health insurance, either through an employer or a government program or by buying their own policies. In return, insurance companies would be prohibited from turning away the sick. Government would subsidize premiums for millions now uninsured.
The law's opponents argue that Congress overstepped its constitutional authority by requiring citizens to obtain coverage. The administration says the mandate is permissible because it serves to regulate interstate commerce.
Associated Press writer Ricardo Alonso-Zaldivar in Washington contributed to this report.