For Republican Governors, Obamacare Exchanges Force an Unenviable Choice
There are countless unknowns still swirling around the Affordable Care Act. Its ultimate price tag is anyone’s guess. Thanks to the Supreme Court’s decision to make the ACA’s Medicaid expansion optional, there’s no way to predict how many uninsured people will gain new coverage. But one of the biggest mysteries shrouding the law is whether state or federal authorities are better suited to manage the insurance exchanges that will regulate and organize individual and small group health insurance policies once the law is fully in effect in 2014.
In a move that boxed in Republican governors who rail against federal intrusion, the authors of the ACA left the crucial job of exchange management to the states. At the same time, the ACA says the federal government will run exchanges for states which don’t set up their own. This clever gambit left red-state governors with a Sophie’s choice of sorts. They could set up insurance exchanges and participate in the implementation of one of the most divisive laws in modern American politics. Or they could refuse, and invite the federal government into their insurance regulatory apparatus, which has historically been governed at the state level.
The Democrats in charge of the Department of Health and Human Services would be happy either way. Controlling more exchanges would be beneficial to advancing their regulatory priorities; ceding control to states would probably save money on IT costs over the long run. (The exchanges will be run through web sites, on which individuals and small groups will be able to compare plans and buy insurance policies.) Either way, the ACA insurance regulations written by the feds would have to be followed.