To build an exchange or not to build an exchange...

I'd prefer that my governor/state leaders opt for a...

  • Federal exchange

    Votes: 0 0.0%
  • State exchange

    Votes: 1 100.0%
  • Federal-state partnership exchange

    Votes: 0 0.0%

  • Total voters
    1

Greenbeard

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Jun 20, 2010
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It was clear when Obamacare was being debated three years ago that it (now along with the SCOTUS ruling on Medicaid) was going to define federalism in the U.S. for a generation. But how exactly that evolves is going to shake out in the implementation.

And right now that's happening most visibly in the decision as to whether states or the federal government will be responsible for a state's exchanges, the new competitive marketplaces for individuals and small businesses being set up under the law. Right now, states that haven't already done so are making their initial decision on this question.

There's an interesting confluence, in some corners at least, in the opinions of folks on the left and right on this matter: states should turn the marketplaces over to the feds.

For instance, here's the liberal rationale presented over at firedoglake in Most Republican States Won’t Build Exchanges and That Is a Good Thing:
I’ve always thought the idea of the ACA being based on state run exchanges instead of one run by the federal government was extremely stupid.

If states want to go beyond what a federal exchange would do, like California’s exchange which will be an active purchaser or D.C.’s which will combine all the small markets, only then does it make sense for a state to make the investment in building their own system. On the other hand, there really is no point in a state taking all the effort to build an exchange that only meets the minimum federal standard and will be basically identical to having a federally run exchange. [...]

On a practical level having governors opposed to Obamacare not involved in running the exchanges should produce better outcomes. I would much rather the exchange I’m using be run by the Obama administration, which is heavily invested in trying to make the law work, than have it run by Republican governors, who are ambivalent about the law’s success.

Politically it is seems as close to a win-win as you can get in the situation. Republican officials who think the law won’t work get to wash their hands of it, Democrats get to try to prove it can work, and regular people will still have access to an exchange.

Meanwhile, conservatives at places like RedState are reaching the same conclusion by asking Will GOP Governors Save us From Obamacare?
The other lynch pin of Obamacare implementation is the creation of state-run health exchanges. These exchanges will be used to help individuals comply with the mandate to buy health insurance – insurance that will become more expensive as a result of the law. Once again, by refusing to set up these exchanges, governors can seriously disrupt the bulk of the law before it goes into effect in 2014, buying us more time until we can repeal the law next year.
Folks, without control of the White House and Senate, this is the only way to deal a fatal blow to Obamacare. Sensing that there is a lot of momentum against implementation, Obama has announced an extension of the deadline until December 14. During that time, he plans to coerce the wavering governors. They must hear from We the People.

Thus far there's been more enthusiasm for developing their own marketplaces in Democrat-led states, though some Republican-led states have decided to build exchanges and some Democrat-led states have opted not to. In many ways, the decision is easier for Democratic leaders, however.

Yesterday, Politico laid out the tricky political calculus that red state leaders are facing in How red-state governors are opening the doors to Obamacare:

Several high-profile GOP governors were still weighing their options. From a political standpoint, refusing to participate in Obamacare might look good in a state or national primary contest down the road, but it could hurt in a general election.
Governors also must consider whether they can avoid getting whacked if folks in their states don’t like the health care system and go looking for someone to blame. Will they sidestep the furor if they didn’t play along or will they just get lumped in with the federal government either way? And if the exchanges prove popular, will they have missed out on a chance to tie themselves to the idea?
Some conservatives argue that it would be much better, and more ideologically pure, for Republican-led states to build their own systems.

Heather Gerken, a constitutional law professor at Yale University, told The Federalist Society that the law reserves valuable powers to state leaders — if they implement the exchanges — and that governors risk limiting their influence with federal regulators if they don’t jump in.

“It creates conditions of bargaining that give the states some leverage,” she said.

What's clear is that, at least for the next few years, there's going to be a mix of state-led exchanges, federal-led exchanges, and federal-state partnership exchanges. How that evolves will be fascinating to watch.
 

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