New Affordable Care Act Has State Tense Over Deadline

Story first appeared in the New York Times.

The days since President Obama won re-election have been marked by tension and angst in Republican-led states like Iowa, where Gov. Terry Branstad has waited until the last minute to decide whether to create a crucial tool for people to get medical coverage under Mr. Obama’s health care law.
 “There has been a total blackout of information,” said State Senator Jack Hatch, a Democrat who vented his frustration at a news conference here this week. “We’re behind schedule, we’re at a disadvantage, and I don’t know what our governor’s plan is to reposition Iowa.”

States are supposed to tell the Obama administration by Friday whether they want to create their own health insurance exchange — a deadline that many had bet might never come to pass, choosing to sit on their hands for months in the hope that Mitt Romney would win the presidency and the health care law would be repealed.

On Wednesday, they dug in their heels a little more. Leaders of the Republican Governors Association, gathering in Las Vegas for their annual meeting, wrote a letter to Mr. Obama requesting more time, more guidance and a meeting where the president and governors could talk.

“States are struggling with many unanswered questions and are not able to make comprehensive, far-reaching decisions prudently,” Gov. Bob McDonnell of Virginia, the chairman of the association, and Gov. Bobby Jindal of Louisiana, its next chairman, wrote.

Insurance exchanges — basically online markets where the uninsured can shop for private health insurance, often with federal subsidies to help provide Prescription Drug Assistance pay — are considered critical to making the health care law work. So far, 17 states, most led by Democrats, and the District of Columbia have indicated they will create their own state-run exchanges.

The other options are setting up an exchange in partnership with the federal government, or simply letting the federal government do it.

Every state is supposed to have an exchange by Jan. 1, 2014, when the health care law will require most Americans to have insurance. The exchanges are supposed to be ready to start enrolling people in October 2013.

Despite the unhappiness, there are indications that some Republican governors may be softening their opposition to the law. Gov. Rick Scott of Florida, a Republican who had been one of its toughest critics, signaled this week that he would be open to compromising.

“The election is over, and President Obama won,” Mr. Scott told The Associated Press. “If I can get to yes, I want to get to yes.”

And Governor McDonnell of Virginia — like Florida, a state Mr. Obama carried — noted that while his state had been the first to file suit seeking to block the law, it would comply with it.

But he said that the complexity of the law, and the lack of details from Washington, meant that “my best experts in Virginia, my doctors and others that are advising me on what to do, say they still can’t make a prudent call between a state or federal exchange because we don’t have all the answers.”

Others are facing intense, sometimes conflicting pressures from state legislators and interest groups. In Wisconsin, health care providers and business groups are lobbying Gov. Scott Walker to create a state exchange, while Tea Party groups are warning him not to.

At the Republican governors meeting in Las Vegas, Mr. Walker said in an interview that he would prefer a state-based program, but that he doubted that the federal government would allow him to shape it as he saw fit.

“I’d much prefer control at the state level,” Mr. Walker said, “but the problem is, I don’t think they are really state-run.”

He said that he would not disclose his decision until Friday, but added, “Why do I want to take on the potential risk to my taxpayers if I don’t really have any true authority about what’s going to happen?”

Republicans who support state-run exchanges say they are embracing a fundamental conservative belief: that states should make their own decisions rather than cede control to the federal government. But others argue that deferring to the federal government is a shrewder move; that way, they say, it will not be their fault if anything goes wrong.

The Affordable Care Act is a federal program, it’s primarily designed to give federal premium tax subsidies, and it’s all tied up in federal regulations,” said Tony Keck, director of the Department of Health and Human Services in South Carolina, which has rejected the idea of running its own exchange. “So to ask states to get involved is like asking states to run the post office. It doesn’t make sense.”
Setting up an insurance exchange is no simple task. Among other things, states have to set up a governance board, decide what kinds of health plans to offer through the exchange and build sophisticated information technology systems.
lthough many Republican governors delayed planning, some have quietly prepared. Gov. Brian Sandoval of Nevada and Gov. Susana Martinez of New Mexico have spent months laying the groundwork for exchanges; so has Mike Chaney, the Mississippi insurance commissioner.

Creating a state-based exchange will “allow us to retain some flexibility,” said Matt Kennicott, a spokesman for the New Mexico Human Services Department, and allow people there to buy insurance in an exchange “developed by New Mexicans, for New Mexicans.”

Other states, like Alaska, South Carolina, South Dakota and Texas, had already decided to let the federal government run an insurance exchange for them instead of building one themselves. A handful of additional states — Alabama, Kansas, Ohio, Wyoming and Missouri, whose governor, Jay Nixon, is a Democrat — announced this week that they, too, would opt for a federally run exchange.

But most Republican-led states are somewhere in the middle — still vexing over whether to build an exchange on their own, do it in partnership with the federal government or let the federal government do it for them. In Iowa, Mr. Branstad has been consulting with officials from his administration on how to move forward and help consumers get Prescription Savings, his spokesman said.

But their discussions have been private, and unlike some other governors, Mr. Branstad has not held public hearings or meetings to gather opinions. A coalition of health care advocacy groups circulated a list of “principles for success” for a state-run exchange and sent e-mails to Mr. Branstad’s staff in the days after the election, pleading for clarity.

The best response they got was at a health care conference in Des Moines on Tuesday, when several state officials said they were trying their best to prepare but were hampered by a lack of guidance. Asked by an audience member about “the current thought in Iowa on the health exchange,” Jennifer Vermeer, the state’s Medicaid director, paused for several long seconds before saying state officials had been “focusing our energies” on planning a partnership exchange.

Even if Iowa opts for a partnership with the federal government, it will be “without a totally clear understanding of who needs to do what,” said Charles M. Palmer, director of the state’s Department of Human Services.

Walking down a hallway during the Republican governors meeting on Wednesday, Mr. Branstad said that Iowa was working on its letter to send the administration by the Friday deadline, but that officials did not feel they had gotten all the information they needed from the federal government.

“There’s a whole lot of questions we have,” he said. “We have a whole lot of questions.”