HispanicBusiness

Gov. Bob McDonnell remains wary of creating a state-run health benefits exchange a week before Virginia must tell the Obama administration how it will proceed.

At Associated Press Day at the Capitol on Thursday, McDonnell noted that he first thought a state-based exchange was the best option because the state would have more control, but he reconsidered.

"If we're going to get into something where we're going to be stuck with the price tag and we're going to have very limited flexibility and we're going to have a lot of federal mandates, then why should we do it?"

McDonnell stressed: There's going to be an exchange, whether it's a federal exchange, a state-based exchange, or a partnership.

Virginia has to notify Secretary of Health and Human Services Kathleen Sebelius of its decision next week.

McDonnell said the state received new federal regulations last week and is looking for any indication that a state-run exchange might be the best approach.

"I don't see it at this point," he said.

The governor also still appears wary of expanding Medicaid. The Supreme Court gave states an option to do so when it upheld the Patient Protection and Affordable Care Act.

In Virginia, an expansion could extend health insurance to an additional 430,000 people, but McDonnell worries that the state will be saddled with huge costs if Washington reneges on promised funding.

Under the health care law, the federal government would pay all of the cost of expanded coverage for three years and then gradually reduce its share to 90 percent in 2020.

"You're going to promise me 90 percent forever and you're broke?" McDonnell said of the federal government. "That's not a very good feeling right now."

McDonnell said he needs to know what kind of reforms, flexibility and waivers the federal government will allow a governor from either party who agrees to expand Medicaid.

"I've asked for months and months and months and months for additional information from the federal government," McDonnell said.

"It's basically radio silence. For a while I thought it was political." Now, he said, on some of the questions, he thinks "they just don't know the answers."