GOP governors say it’s better for Obamacare to be forced on them than to legitimize it Red-state govs open door to Obamacare

Bobby Jindal’s got a funny way of showing how much he hates Obamacare and Washington bureaucracy: The Louisiana governor’s about to invite the feds to set up a health insurance exchange right in his backyard.

So is Rick Perry in Texas. Ditto for John Kasich in Ohio. And Scott Walker in Wisconsin.


These Republican governors, and more than a dozen others in red states around the country, have decided it’s better to have Obamacare forced on them than to legitimize it by setting up their own exchanges, even if that means empowering the federal government at the expense of the states.

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It’s a stick in the eye of a just reelected president whose health care plan is still opposed by about half the country — and an indication that some Republican governors have no intention of backing down just because President Barack Obama won another four years.

“I’m not lifting a finger,” Maine Gov. Paul LePage told Bloomberg this week. "We’re not going to get involved. We’re going to let Mr. Obama do a federal exchange. It’s his bill.”

By late Friday, 19 states had indicated they would let the feds run their exchanges — most of which went to Mitt Romney on Election Day.

Another 11 states were officially undeclared, while 20 states and the District of Columbia had announced they would set up exchanges partially or fully run by their states.

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The Republican governors of several big states, including Florida’s Rick Scott, New Jersey’s Chris Christie and Arizona’s Jan Brewer, remain in the undecided column. That may have factored into federal health officials’ decision to postpone Friday’s planned deadline for signing up until mid-December.

The Republican Governors Association had asked for the extension and applauded it when it was announced Thursday night. Kasich of Ohio even said in a letter to the Department of Health and Human Services that he could be persuaded to sign up for a state-based exchange if certain concessions are made in Washington.

Most Democratic states, including California, New York and Illinois, will either set up their own independent exchanges or partner with the federal government to begin establishing them.

But it’s not an entirely partisan calculation: In fact, there’s a spirited back-and-forth within Republican circles about which option is best. In Mississippi, that debate has turned into a mud fight. The state’s insurance commissioner plans to set up an exchange despite the governor’s protestations.

“I continue to believe that establishing a non-free market health insurance exchange is a gateway to full implementation of Obamacare in Mississippi. The federal government has never funded a program it did not eventually control and expand, and I regret the submission of a letter of intent by the Insurance Department stating that Mississippi will establish a health insurance exchange as demanded under Obamacare,” Gov. Phil Bryant said earlier this week. “This is one more step toward the largest entitlement program expansion in American history.”

Former HHS Secretary Mike Leavitt, who was head of Mitt Romney’s presidential transition team, has been working to get states to create their own exchanges. The former Utah governor’s outfit, Leavitt Partners, argues that it will be a “bureaucratic nightmare” for states to deal with the federal government if they don’t have their own exchanges, that states would be giving up the power to design their own uniquely tailored systems if they default to the feds, and that they risk losing regulatory authority over insurers that operate in their states under the auspices of the federally designed exchange.

Walker said states won’t have control anyway, labeling the system “SINO,” or state in name only, as he announced Friday that his state won’t set up its own exchange.

“No matter which option is chosen, Wisconsin taxpayers will not have meaningful control over the health care policies and services sold to Wisconsin residents,” Walker wrote in a letter to HHS. “If the state option is chosen, however, Wisconsinites face risk from a federal mandate lacking long-term guaranteed funding.”

Several high-profile GOP governors were still weighing their options. From a political standpoint, refusing to participate in Obamacare might look good in a state or national primary contest down the road, but it could hurt in a general election.

Tennessee’s Republican Gov. Bill Haslam took advantage of the HHS delay to punt.

“We are hopeful in the coming weeks we will receive answers from Washington to the many questions we’ve asked in our effort to have a full picture of the future of exchanges in Tennessee,” he said in a statement.

Governors also must consider whether they can avoid getting whacked if folks in their states don’t like the health care system and go looking for someone to blame. Will they sidestep the furor if they didn’t play along or will they just get lumped in with the federal government either way? And if the exchanges prove popular, will they have missed out on a chance to tie themselves to the idea?

Paul Clement, lead litigator in the Supreme Court case against the ACA, warned The Federalist Society about public antipathy and the possibility that voters won’t make a distinction between state and federal governments.

“When the citizen gets hacked off at the state Department of Health and Human Services because they just imposed some outrageously stupid rule, it’s a problem if the basis for that rule is federal but nobody knows this,” he said.

Some conservatives argue that it would be much better, and more ideologically pure, for Republican-led states to build their own systems.

Heather Gerken, a constitutional law professor at Yale University, told The Federalist Society that the law reserves valuable powers to state leaders — if they implement the exchanges — and that governors risk limiting their influence with federal regulators if they don’t jump in.

“It creates conditions of bargaining that give the states some leverage,” she said.

There was always an out for governors: The deadline was, and probably still is, soft. That is, there’s nothing stopping them from building their exchanges later.

Kasich said he wouldn’t set up an exchange but left himself a little wiggle room.

“Given that HHS has extended the deadline by which states must submit their blueprint applications, Ohio reserves the right to amend its intentions as stated in this letter, should HHS announce any changes or present states with new information, rules or interpretations of the law,” he wrote in a letter to the Centers for Medicare and Medicaid Services.

On the other hand, they can also threaten to stop work on state exchanges if they don’t think they’re getting enough cooperation from the feds.

Iowa Gov. Terry Branstad, a Republican, announced Friday that the state will build its own exchange — but he also said he could change his mind down the road if he doesn’t get more answers from the Obama administration.

“If forced to make a decision with incomplete information, then I have no choice but to default on some level to a federal exchange,” Branstad wrote in a letter to HHS. “That is not my preferred path forward … but the roadblocks and impediments in front of us may leave us no choice.”

Jindal, a health policy expert by trade, told the Huffington Post’s Jon Ward this week that while he’s not going to set up an exchange, he hopes that Obama’s second term will bring more cooperation between the federal government and the states on a range of health care issues.

“We are certainly going to go to the president and give him a chance to actually be bipartisan and give him a chance to give us the flexibility to bring more market-based competition and ideas into health care programs, and I hope he’ll work with us to do that,” Jindal said.

Jason Millman, Kyle Cheney and James Hohmann contributed to this report.

This article first appeared on POLITICO Pro at 7:16 p.m. on November 16, 2012.