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Obamacare countdown: States all over the map on insurance markets

The Affordable Care Act may be the law of the land, settled by the recent presidential election. But the 50 states have a big role to play, too, and many are scrambling to decide what that role will be.

Some Republican-led states are still fighting the whole notion of Obamacare. Specifically, they’re refusing to cooperate with Washington on setting up new health insurance markets – also called exchanges – where individuals and small businesses can shop for private health-care coverage.

According to the latest tally, 16 states and the District of Columbia have decided to set up their own insurance exchanges; another five states have decided to work with the federal government to do so; and 19 states have said they will default to the only other available position – leaving it up to Washington to set up and administer their insurance markets. The 10 remaining states have yet to announce their decisions.

Not surprisingly, most of the states setting up their own insurance exchanges – New YorkCalifornia, and Maryland among them – are run by Democrats. But some Republican-led states are, too, including MississippiNevadaIowa, and New Mexico.

In a recent letter to President Obama, however, Republican Govs. Bob McDonnell of Virginia andBobby Jindal of Louisiana (the outgoing and incoming chairmen of the Republican Governors Association) warned of problems. “It is clear that putting in place the new programs you championed will be an enormous strain on state governments and budgets, as well as the federal government,” they wrote, adding that the time frame and many provisions in the Affordable Care Act “are simply unworkable.”

“States are struggling with many unanswered questions and are not able to make comprehensive far-reaching decisions prudently,” the two Republican governors said.

Nevertheless, some states are ahead of the game. On the recommendation of a state health-policy commission back in 2006, Oregon passed legislation establishing an insurance exchange last year. Other states have followed suit, either through legislation or (as in New York) by gubernatorial order.

But as a recent Urban Institute report points out, “many state policy environments remain politically contentious, and progress in exchange development has been slow for some of them as a result.” The report warns, “States not achieving significant milestones by now … are unlikely to be able to establish a state-based exchange by late 2013.”

It’s a difficult situation for such states – particularly those with conservative governors and legislatures strongly supportive of state control. Most of them had been part of the lawsuit challenging the constitutionality of the Affordable Care Act. And even though the US Supreme Court mostly upheld Obama­care, they’re not ready to capitulate.

“As long as the federal government has the ability to force unknown mandates and costs upon our citizens, while retaining the sole power in approving what an exchange looks like, the notion of a state exchange is merely an illusion,” Texas Gov. Rick Perry (R) wrote toHealth and Human Services Secretary Kathleen Sebelius.

Republican Govs. Scott Walker in WisconsinNathan Deal in GeorgiaSam Brownback in KansasDave Heineman in Nebraska, and Robert Bentley in Alabama, along with Gov.-elect Mike Pence (R) inIndiana, said essentially the same thing in announcing that they would not be crafting insurance exchanges, which means Washington will do it for them.

That’s not necessarily a popular stand. A recent Associated Press poll found that 63 percent of Americans would prefer states to run the exchanges; 32 percent favor federal control.

Republicans aren’t the only ones unhappy. Missouri Gov. Jay Nixon (D) would like to set up an insurance exchange, but he had to tell Secretary Sebelius he can’t. On Election DayMissourivoters approved a ballot measure prohibiting the governor from establishing an exchange unless it is authorized by the state legislature or the public.

In Florida, meanwhile, Gov. Rick Scott (R) has decided that fighting to prevent Obamacare is no longer an option. He told Sebelius he’s now willing to work with the Obama administration in setting up an exchange.

At a meeting of the conservative Federalist Society in Washington recently, Governor Scott was asked why he had changed his position. His answer: “Mitt Romney did not win the ­election.”

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