Friday was supposed to have been the cut-off date for state governments to decide if they would create their ObamaCare insurance exchanges, but the feds decided to extend the deadline by another month. There has been a lot of resistance to the exchanges at the state level, and it was thought some governors were waiting for the election to make their decisions.
The election is behind us now, and President Obama won, but the state rebellion against ObamaCare has only grown stronger. On Friday two more states, Wisconsin and Ohio, announced that they would not create their exchanges. Most of the resisters and hold-outs have Republican governors, although in Missouri the Democrat governor, Jay Nixon, was obliged to pass on creating the exchange by referendum.
The governors who refused to create their exchanges have cited heavy-handed, often unclear regulations from Washington, as well as a refusal to be burdened with the costs of implementing a massive federal program. "This is a federally-mandated exchange with rules dictated by Washington," said Texas governor Rick Perry, in a letter to Health and Human Services Secretary Kathleen Sebelius. "It would not be fiscally responsible to put hard-working Texans on the financial hook for an unknown amount of money to operate a system under rules that have not even been written."
???I am not going to set up a state-based exchange that will create a tax burden of up to $50 million on the people of Alabama,??? said Governor Robert Bentley.
"Yesterday, we told U.S. HHS Secretary Sebelius that South Carolina will not set up a state-based health care exchange," Governor Nikki Haley wrote on her Facebook page Friday morning. "As we worked through the process of analyzing health care options available to South Carolina, it became abundantly clear that ObamaCare's state-based exchange programs are not state-based at all. Instead, they simply pass along to the state the burdens of a new and cumbersome bureaucracy."
Louisiana Governor Bobby Jindal also sent a letter of refusal to Sebelius on Thursday, declaring that ever since ObamaCare was signed into law, "the State of Louisiana has repeatedly stated that the law has severe legal problems, is bad policy, and is unworkable."
"The Patient Protection and Affordable Care Act remains a flawed piece of legislation that fails to fix the fundamental existing problems in the United States health care system, particularly the unsustainable rising costs faced by American families and small businesses," Jindal continued. "Instead, we are faced with a more tightly controlled federal-run health insurance market that will increase costs, undermine the private health care marketplace, and weaken private sector job creation."
Jindal's critique of ObamaCare is among the longest and most detailed offered by any of the governors, filling six pages with bullet-pointed doom. Among other things, he objected to the tax increases ObamaCare will force upon insurance companies, employers, and employees, which he wanted his state's government to be no part of. He also noted that Washington is asking the states to sign on to a system that hasn't been fully defined yet, with key regulations unwritten and promised cost-comparison data yet to materialize. ObamaCare is one of the largest and most expensive laws ever passed, but it's amazing how much of it remains written in lemon juice on strips of tissue paper.
The new members of the resistance sounded similar notes. "At this point, based on the information we have, states do not have the flexibility to build and manage exchanges in ways that respond to unique needs of their citizens or markets," said Ohio Governor John Kasich.
Governor Scott Walker of Wisconsin grimly observed that whether he established a state exchange or not, "Wisconsin taxpayers will not have meaningful control over the health care policies and services sold to Wisconsin residents." He said that when he invited champions of a state-run exchange to sell him on the idea, "the answer has essentially been a shrug."
Actually, those advocates do have a bit more than a shrug to offer, but these Republican governors are correct to see that it's a bad deal nonetheless. As the Chicago Tribune explains:
By not setting up its own exchange, Wisconsin will lose control over several key decisions over how easily consumers will be able to compare insurance plans, what plans can be sold through the exchange, what the plans must cover and their cost.
Additionally, the exchanges will offer coverage to people buying in the individual and small business markets, and those are areas that states have traditionally regulated. Without a state-run exchange, states would undercut the role of their own regulators in an important new market.
The local control states like Wisconsin are ostensibly losing doesn't amount to much; Washington will be overriding all those state regulators anyway, and that process will only intensify as the fiscal disaster known as ObamaCare continues to explode in cost, while collapsing in service. These rebellious state governors are opting out of a system that would have dumped much of the cost for ObamaCare, and a big share of responsibility for its failure, into their laps without much to show for it. They were being asked to become "junior partners," and bill collectors, for a "business" they would never have any meaningful say in running.
Some states, such as North Carolina and Arkansas, have opted for more explicit "partnership" or "hybrid" systems, while many others have dutifully agreed to create their ObamaCare insurance exchanges. Perhaps some of the refusing governors might change their minds and consider hybrid systems in December, if they get the firm regulatory parameters and hard data they've been requesting from the federal government. When he opted for a federal exchange, Governor Bob McDonnell of Virginia said, "I don't want to buy a pig in a poke for the taxpayers of Virginia. Without further information, the only logical decision is for us to use the federal option." He might take another look at the pig if HHS marches it out of the poke and gives him a better view.
And Texas governor Rick Perry said that as long as the costs and mandates of ObamaCare remain unknown, "the notion of a state exchange is merely an illusion." ObamaCare contains a lot of those. It's hard to blame these governors for wanting the central government to remain fiscally and operationally accountable for a system that has been so poorly designed, and imposed despite so many strong objections.