Mike Chaney said he'll oversee the health insurance exchange despite the objections. Republicans feud over Obamacare

Republicans have been fighting Democrats for years over Obamacare. Now, they’re fighting each other.

In red-state capitols in places like Idaho, Tennessee and Mississippi, Republicans are clashing over whether to participate in a Democratic president’s signature legislative achievement.


At issue are the state-based health care exchanges, set to start in 2014, which will create new marketplaces for people who can’t get insurance elsewhere. If states don’t declare their plans to set one up by Dec. 14, the Department of Health and Human Services will begin doing it for them. So Republicans face a choice: Create their own and appear to endorse a federal government health care takeover, or allow Washington to take control.

Nowhere is the fight playing out more publicly among Republicans than in Mississippi.

Mississippi Insurance Commissioner Mike Chaney informed HHS Secretary Kathleen Sebelius Nov. 14 that he will oversee the creation of a health insurance exchange despite the objections of Gov. Phil Bryant. On Monday, in a previously unreleased letter, Bryant wrote Sebelius to say he “feels compelled to notify you of my complete disagreement with this move.”

Chaney — who by state law has broad authority to create a health care exchange without oversight from state legislators or Bryant — said the governor has failed to explain why Washington would be better than Mississippi to operate the state’s health care exchange.

The two Republicans have squabbled since July over whether to pursue an exchange, with Bryant insisting the state not do so and Chaney arguing in favor.

“The governor asked me, ‘What authority do you have to do this?’” Chaney told POLITICO. “And I said, ‘Phil, what authority do you have to stop me?’”

After Obama won reelection, Chaney said he confronted Bryant Nov. 12 in a men’s room during a local conference and asked why the governor wasn’t returning his phone calls. The governor, he said, explained that he’d been on a hunting trip out of cellphone range. The next day, the two men met at the Mississippi Governor’s Mansion, where Chaney said Bryant told him that the GOP governors had agreed to stand together in opposing the exchanges.

“I said, ‘Can you articulate any reason for us not to do this?’” Chaney told POLITICO. “He said, ‘We — some of the Republican governors — should not give in to the Obama administration on this, because they will change the rules and control everything. You cannot trust them.’”

Bryant’s office confirmed the meeting but declined to discuss specifics of the conversation.

The next day, Chaney, a vocal Mitt Romney supporter who says “I hate the Affordable Care Act” and would have voted against it, submitted his exchange plans to HHS. Two days later, Bryant fired off a news release condemning the move.

Bryant then wrote to Sebelius on Monday, reiterating his opposition to the national health care law and restating his belief — common among conservatives — that state-based exchanges are under state control “in name only” and will ultimately be operated by the federal government.

“As governor, I will continue to resist the expansion of Medicaid and other aspects of the ACA that will have a negative impact on our state economy or its people,” Bryant wrote.

While Obama for months touted elements of the health care law as part of his campaign stump speech, his administration is taking a hands-off approach to the state-level deliberations about whether to participate. The White House and HHS declined to comment about the situation in Mississippi.

An HHS official said the department has been providing technical assistance to states that ask for it and offering states “significant flexibility as they work to implement the law.” But the department is not providing public support to pro-exchange Republicans — and such help probably wouldn’t be welcomed.

In Kansas, Republican Insurance Commissioner Sandy Praeger — a proponent of creating a health care exchange — devoted two years to an application enabling the state to partner with HHS. On Nov. 8, GOP Gov. Sam Brownback said the state would not create an exchange.

“I think it’s about politics,” said Praeger, who was first elected to statewide office in 2002 and twice since then. “There’s still a feeling with some conservative governors around the country that somehow not participating will cause this program to fail.”

Despite Brownback’s action, Praeger said she intends to press for a state-based or partnership exchange for the remainder of her term, which expires in 2015.

“I think if they really stop to think about it, being a federal-versus-state option, the state option is a much more conservative approach,” she said. “What they keep coming back to is, ‘Well, if it doesn’t work we don’t want to be blamed for having it fail.’… I think having a state exchange or at the very least a partnership exchange is better for our citizens, certainly better for our companies. I think our citizens are better served if it’s our department handling our consumer complaints. I just think hands-on is better, especially with health care.”

Michigan GOP Gov. Rick Snyder spent months planning a state exchange, which passed the GOP-controlled state Senate but not the state House. On Thursday, a Republican-dominated state House committee killed Snyder’s exchange legislation, leaving the governor unable to impose one.

Snyder’s vocal advocacy of the exchange may hurt him with the state’s conservative activists, said Annie Patnaude, deputy director of the Michigan branch of the Koch-funded Americans for Prosperity.

“For people who are conservatives, it’s a bit disillusioning,” Patnaude said, though she said her organization approves of his record on other economic issues. “Conservatives, they feel upset that he would be quite so vocal in support of something like that. I think it’s a real disappointment.”

Snyder’s office did not respond to requests for comment.

In Idaho, Republican Gov. Butch Otter supports a state-run exchange — but the GOP-led state Legislature doesn’t. State Rep. Lynn Luker compared state-based exchanges to children’s theater in which the state has the illusion of control but federal overseers are really pulling the strings.

“The cost-benefit analysis here does not favor the states,” Luker said. “The cost and risk of obtaining the minimal control that has been proffered in this puppet show is too high.”

Otter’s spokesman said he is declining all interviews about the health care exchange.

In Tennessee, GOP Gov. Bill Haslam is weighing the idea of creating an exchange while Republicans are pressuring him not to do so. His spokesman, David Smith, said Haslam, “is reviewing the information as it comes and continues to seek answers to a number of unanswered questions.”

Republican Mike Bell, who represents a state Senate district in southeast Tennessee, said he is flummoxed by why Haslam is even considering participating. The required legislation, he said, would be dead on arrival in a state Senate in which Republicans will hold 26 of 33 seats come January.

Bell said he is holding onto the admittedly slim chance that if Tennessee joins states tossing responsibility for the exchanges to Washington, the law could still be stopped.

“I still hold out hope, even though I know it’s a faint hope, that some way the implementation of this law can be stopped,” he said. “One of those hopes is that if enough states throw it back to the federal government, as I understand it money still has to be appropriated at the federal level to be able to do that. I’m hoping that the Republican House in Washington could be able to stop that.”

Elsewhere, Republicans have devoted considerable resources toward building state exchanges, only to scuttle them after Obama won reelection.

In 2011, Alabama Gov. Robert Bentley created an office to build a state exchange and appointed an executive director to lead it. But earlier this month, Bentley folded the project, declaring the health care law would add an unsustainable tax burden for Alabamians.

And Arizona Gov. Jan Brewer announced Wednesday that her state won’t set up its own exchange, even though it had been working on one. “[T]hough I am a steady advocate of local control, I have come to the conclusion that the state of Arizona would wield little actual authority over its ‘state’ exchange,” Brewer said in a statement.

In Mississippi, though, there is little the governor can do to stop the state’s insurance commissioner from moving ahead, according to Jameson Taylor of the Mississippi Center for Public Policy, a conservative think tank that opposes a state exchange.

In his Monday letter to Sebelius, Bryant wrote that he “is exploring my options,” though his office did not say what those options are.

Bryant, Taylor said, could withhold the state’s Medicaid funds from the exchange or push legislators to change the law that grants Chaney broad power.

“People expect the governor to be in charge of this,” Taylor said. “Maybe the problem in Mississippi is that our insurance commissioner is elected and not appointed by the governor. He doesn’t have many options.”

Meanwhile, Chaney claims support from the state’s moderate Republicans, Democrats and Bryant’s predecessor in Jackson — Haley Barbour, who favored creating a state health exchange in 2007, when the Heritage Foundation was pushing the idea. In the spring of 2010 when the ACA passed and Barbour was governor, Mississippi was among the first states to take steps toward creating an exchange compliant with the federal law.

The day Bryant issued his final statement opposing the health care exchange, Chaney said he got a call from Barbour.

“Haley told me,” Chaney recounted, “he said, ‘Just hang in there. You need to find another word for exchanges.”

Jason Millman contributed to this report.