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Will Red States Start Running Their Own Obamacare Exchanges?

[ Posted Thursday, October 24th, 2013 – 16:23 UTC ]

The hearings have started on Capitol Hill, and there will likely be plenty of fodder mined by Republicans over the awfulness of the Obamacare exchange launch for weeks to come. That much is certain, at the very least. But I can't help but wonder what the future will look like this time next year, especially on one key question: will "red" states begin to set up their own state health insurance exchanges, or will they continue to allow the federal government to run their exchanges for them?

This might seem an esoteric point, in the midst of the frenzied finger-pointing in the news today, but it's been an aspect of the entire Obamacare debate which has always fascinated me. Plus, I already wrote a finger-pointing sort of article on Obamacare this Monday, so you'll have to forgive me for my attempts at peering into the future today.

Of course, Obamacare supporters would much rather focus on the future right now, but that's not really my main point here. The assumption that the Obamacare exchange website will eventually get all the bugs worked out and start reliably working for everyone is a comforting thought for Obamacare supporters, but it is also a pretty safe bet. The key will be over when that "eventually" will arrive, because the politics just gets worse for the president the longer it takes. But, like I said, I'm setting all of that political discussion aside -- I'm just going to use it as a premise.

Because my main subject is how long it will take for Republican governors and legislatures to realize that they're violating one of the key tenets of their political faith. Being a Republican means believing that the smaller government is, the better. And not just "small" in terms of budget matters, but that local governments are the best, followed by state governments, and that the worst government is federal. I don't believe any serious Republican would contradict those statements -- they've long believed this to be true. Look into their history of supporting "block grants" for proof, if need be.

The launch of the Obamacare website would seem to be a textbook case for this "smaller is always better" argument. The state-level exchanges also had some startup problems, but they were much smaller and much more easily fixed. The 34 states that chose not to run their own exchanges might, eventually, have some second thoughts about their decision. Especially in heavily-Republican states, one would expect. Eventually state politicians may adopt a "See? I told you so! The federal government screws up everything it touches!" attitude, and reverse course on setting up their own exchanges. Even if all the Obamacare website problems are fixed this coming weekend (which, at this point, is beyond even "wildly optimistic"), the failure of the launch is going to be an albatross around its neck for the next few years. Eventually the startup problems will be forgotten, but (again) it's hard to predict when that "eventually" is going to happen.

In the meantime, the success stories are happening in places like California, New York, and Kentucky -- who are all running their own state-level exchange websites. Obviously, the poster child for Republican states may be Kentucky rather than those other two. Many people in certain parts of America have a seething distrust of anything from New York or California, to put it politely. But Kentucky doesn't fit into that category. So the success of the "Kynect" effort (their name for Obamacare in the Bluegrass State) may become a model other states may begin to emulate.

Obamacare was initially a Republican idea, remember. It was first proposed in a paper from the same Heritage Foundation that now attacks the idea, and it was first implemented at the state level by Mitt Romney. When Obamacare was passed, it tilted heavily towards Republican ideas, in a futile effort to court Republican (and Blue Dog Democrat) votes. So there are block grants in there so the states don't have to pay to set up their own exchanges. All a red state would have to do would be to decide that they're going to accept this money and "take the power away from the federal government!" The slogans would just write themselves. And now that 16 states have set up their own systems, the software to run it is likely already available, almost "off the shelf" -- just replace "Kynect" everywhere with your own state's name.

So, in looking forward, I do wonder if there will be a movement (perhaps during next year's election season) at the state level to exit the national exchange. If there is such a movement, I will be looking for it to come from Republican governors and legislatures, at least at first. The split, as it stands, is 16 states running individual Obamacare exchange websites, and 34 on the national exchange site. I wonder what that split will look like one year from now.

-- Chris Weigant

 

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8 Comments on “Will Red States Start Running Their Own Obamacare Exchanges?”

  1. [1] 
    Paula wrote:

    I hope Ohio will be one of the first examples (although I don't think of Ohio as a red state - it teeters back and forth. Call it purple.) Hopefully Kasich will go down in 2014 and if a Dem comes in it would be great if he/she would handle the exchange as originally intended. And that would be a lovely trend.

  2. [2] 
    akadjian wrote:

    Ohio ... yes!

    Even Kasich recently went around his own base recently (in a rather drastic fashion) to support Medicare expansion.

    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/21/ohios-new-medicaid-expansion-could-cover-330000-people/

    I think his belief is that people will see him as moderate. He is doing this because he is in a virtual statistical tie with Ed Fitzgerald.

    -David

  3. [3] 
    nypoet22 wrote:

    i agree, running the exchanges on the state level would make a lot of sense. but would you be constrained to buy only from the exchange in your own state?

  4. [4] 
    Paula wrote:

    David (2):
    I'm starting to get fundraising emails etc. from Ed Fitzgerald's campaign -- what do you think of him? Will he do better than Strickland? (I liked Strickland - except for legalizing gambling) but I didn't feel that he'd grasped the tenor of the times during his last run.)

  5. [5] 
    michty6 wrote:

    And not just "small" in terms of budget matters, but that local governments are the best, followed by state governments, and that the worst government is federal. I don't believe any serious Republican would contradict those statements -- they've long believed this to be true

    Meh I wouldn't read too much into this. The entire Republican agenda is a complete paradox: 'Killing is bad! But guns are cool! But abortion is evil! But the death penalty is cool! But killing foreigners is cool! etc

    Or the most recent: 'Obamacare is too long, the bill is massive, so much bureaucracy'... What did they ask for in the budget deal? MORE bureaucracy in Obamacare (verification of income)!

    Trying to apply logic and reason to irrational, insane people is an insane act in itself...

  6. [6] 
    Michale wrote:

    i agree, running the exchanges on the state level would make a lot of sense.

    Eliminating state boundaries for insurance makes even more sense..

    Tort reform makes the most sense of all..

    But that intrudes on the Dem Party promises to trial lawyers...

    Musn't piss off the lobbyists...

    Remind me again how Dems differ from Republicans??

    Michale

  7. [7] 
    Michale wrote:

    Will state exchanges allow Americans to keep their doctors and keep their plans, as Obama promised???

    Michale

  8. [8] 
    db wrote:

    Michale,

    Tort Reform is a a buzz word. Ask instead why the Medical Profession continues to protect Doctors who malpractice. I figure I recall is that 90% of the malpractice claims are produced by 5% of the Doctors.

    I agree that State boundaries are & ought to be irrelevant for the purposes of obtaining insurance (of any type)

    "Will state exchanges allow Americans to keep their doctors and keep their plans, as Obama promised???"

    Yes, unless those policies don't meet minimum requirements for coverage. Or if the Insurance Company decides not continue writing such policies.
    Individual Doctors can retire or otherwise refuse to be part of the system as well.

    If you ask me, (& you didn't) the cost of Medical School is a major flaw in the Health Care System. A quarter million in student loan debt will affect anyone's perspective.

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