In a move his opponent is criticizing as "playing politics," State Rep. Scott Perry, R-Dillsburg on Monday introduced a bill that would bar Pennsylvania from creating or participating in a state-based health exchange required in a federal law to expand insurance coverage.

While preventing the state from participating in the exchange mandated under the federal Patient Protection and Affordable Care Act, House Bill 2655 would allow state agencies or departments to "interact with the federal government with respect to the establishment of a federally facilitated exchange." That means the state wouldn't set up the exchange but would work with the federal government when it does.

Under the federal law, states can choose to either create the exchange to prepare for the law's implementation, to help the federal government create the exchange, or to let the federal government create the exchange.

Perry said Tuesday night that letting the federal government run the insurance exchange is the "lesser of two evils" because he believes the federal government will have "iron-fisted control" over its operations. He cited a sentence of the law saying a state exchange "may not establish rules that conflict with, or prevent the application of regulations promulgated by the federal Secretary of Health and Human Services."

"The only thing the state would be allowed to do is collect money, administer the program, and fine people who don't comply," he said. "If the federal government wants to do this ... then they should take responsibility for its shortcomings or its successes."

While Perry said it would cost about $100 million for the state to create the exchange, federal grants are available for planning and implementation and for the first year of operation. In January, Pennsylvania was awarded $33 million to build out an exchange.

'A ploy': Perry has said he would vote to repeal the health care reform if his bid for the U.S. 4th Congressional District seat is successful.

His Democratic opponent for that seat, Harry Perkinson, said Perry's new bill is "a ploy" to garner attention before the election.

If the bill is passed, it "won't change anything except that Pennsylvania won't have a direct say in the exchange," Perkinson said. "And it'll probably take jobs from the area because those people will be set up in (Washington,) D.C. The federal government will operate it and set it up and, at the very best, the state can come in and partner."

He said allowing the federal government to create the exchange is antithetical to the small government values for which Perry "says he stands."

Perkinson's interpretation of the sentence Perry cited from the law means only that states can't change the provisions of the law, such as preventing insurance companies from denying coverage to people with preexisting conditions, Perkinson said.

"I don't see where that's being iron-fisted," he said. "That's saying you'll comply with the law. He doesn't care about people with preexisting conditions and ... all of the things the insurance companies were allowed to do before. These are all important aspects he's just blowing off, trying to generate fear and loathing about things that aren't really there."

Will it pass? While Perry is the prime sponsor of the bill, referred to the House Health Committee, it also lists as sponsors Majority Whip Stan Saylor, R-Windsor Township, Seth Grove, R-Dover Township, and Will Tallman, R-Hanover, and 19 other legislators.

Grove said he doesn't think the state will meet the federal deadline to create the exchange regardless of whether Perry's bill passes.

"Without a doubt, we're not meeting the deadline," Grove said. "There's been no discussion on language (to create the exchange). Where does that leave us? Basically we're, at this point, looking at the federal government implementing the exchange in Pennsylvania."

Grove said he understands the debate from people who think the state should take control of the exchange "to protect Pennsylvania from the federal government." But he said he would rather the federal government pay for the exchange and avoid the state "getting on the hook right away" with the exchange.

Perry said meeting the deadline would be difficult, and he also doubts there's enough time left in the session to pass his bill.

He said he just wanted to "draw attention to it, because we're going to have to deal with it one way or another."

Perry's bill is one of several Republican initiatives nationwide to stall the implementation of the law, which Republican presidential candidate Mitt Romney and other GOP congressional candidates have pledged to repeal.

- Reach Christina Kauffman at ckauffman@yorkdispatch.com.