Politics & Policy

Obamacare: For State Republicans, It's Decision Time


Obamacare: For State Republicans, It's Decision Time

Photo Illustration by 731; Bloombeerg (3); Alamy (2); Getty Images (3)

Florida Governor Rick Scott abhors the Affordable Care Act. He campaigned against the health-care law when he ran for office in 2010 and has rarely missed an opportunity to vilify it since. Even after the Supreme Court upheld it, the Republican told Fox News (NWS), “We’re not going to implement Obamacare in Florida.”

So Scott was noticeably uncomfortable on Nov. 16 when he told reporters at a Washington meeting of the conservative Federalist Society that he wanted to meet with administration officials to discuss creating a state-run health exchange, as required by the law. “Governor Romney didn’t win the election,” Scott lamented. “So it’s not an option to repeal Obamacare.”

Republicans who were counting on a repeal of the law are agonizing over whether to finally embrace it and even tussling with their own party members over what to do next. House Majority Leader Eric Cantor, a Tea Party favorite from Virginia, has called for trimming Obamacare as part of the fiscal cliff talks. But states have to tell Washington by Dec. 14 if they’ll set up their own exchanges, the online marketplaces where uninsured consumers will shop for health coverage. If they refuse, the federal government will do it for them. “The supreme irony is that these are the states that complained the most about a government takeover of their health-care system,” says John Gorman, a health-care industry consultant. “That’s exactly what they are going to get because of their inaction.”

Only Washington, D.C., and 17 states, mostly led by Democrats, plan to run their own exchanges, according to the Henry J. Kaiser Family Foundation. Six others want to partner with the federal government to set up and run the insurance markets. Ten more, mostly Republican-led, are undecided. Seventeen states, most of them red, prefer that Washington take over—figuring that’s better than doing anything that might be construed as endorsing Obamacare.

New Jersey Republican Governor Chris Christie is acutely aware of that dilemma. He vetoed a bill that would have created an exchange before the high court upheld the law in June. If Christie changes his mind, it would probably help his 2013 gubernatorial reelection campaign in the heavily Democratic state. But it might hurt his chances with Republicans around the country if he runs for president in 2016. “Decision time, Governor,” wrote the Star-Ledger in November. “Stop playing coy with the uninsured.”

In Mississippi, Governor Phil Bryant, a persistent critic of Obamacare who personally sued the administration to stop the law, is feuding with fellow Republican Mike Chaney, the commissioner of insurance. Bryant wants Washington to handle Mississippi’s exchange. Chaney doesn’t want the federal government involved because he believes the state would have “zero control.” Before the election, Chaney, a Romney backer, said he’d submit a plan for a state exchange to the Department of Health and Human Services if Obama won. “I will file a blueprint for the exchange on Nov. 16 unless I get a court order from some idiot out there trying to stop me,” he said. He ended up doing so two days ahead of his own schedule.

Sandy PraegerPhotograph by Brendan HoffmanSandy Praeger

Sandy Praeger, Kansas’s GOP insurance commissioner, has been at odds with Republican Governor Sam Brownback. Praeger wanted her state to work with the feds on a hybrid exchange. After the election, Brownback went ahead and told Washington to do it. “If they really stop to think about it, being a federal-versus-state option, the state option is a much more conservative approach,” Praeger told Politico.

Idaho’s Butch Otter advocated what he called a state-run “free-market” exchange only to be thwarted by his state’s GOP-dominated legislature. Then there’s Michigan Governor Rick Snyder. A moderate Republican, he favored putting the state in charge. But on Nov. 29, the health policy committee in the GOP-controlled Michigan House of Representatives voted down a bill that would have let the state run its own insurance marketplace. Mike Shirkey, a Republican state representative who opposed the bill, says he hopes that vote will spark a larger rebellion against Obamacare. “Back in the 1770s,” he says, “when the people in Boston decided enough was enough, they drew a line in the sand. If the states that are resisting the Affordable Care Act take a strong enough stand, who knows what will happen?”

Insurance marketplaces are supposed to be up and running by October 2013, so it’s unrealistic for Obamacare opponents to cling to their hope of repeal. Bryce Williams, managing director of exchange solutions for the consulting firm Towers Watson (TW), says Medicare faced similar resistance after President Lyndon Johnson signed it into law in 1965. “There continued to be complaints in some states that it was too expensive for literally a year and a half to two years,” Williams says. He believes that once Obamacare opponents get over the “afterglow” of the election, they’ll pass bills enabling their states to take control of federally operated exchanges—which the health-care law permits. Washington, says Williams, “really doesn’t want to run these things.”

The bottom line: Even after the Supreme Court’s ruling on Obamacare and Romney’s loss, GOP lawmakers are warring over how to comply with the law.

With Michael C. Bender and Margaret Newkirk
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Leonard is a staff writer for Bloomberg Businessweek in New York.

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