The House Republican repeal bill narrowly approved Thursday lets states opt out of much of Obamacare — but not a single governor has stepped up to say they want to take advantage of that leeway.

Officials in a dozen states surveyed by POLITICO weren’t eager to embrace opt-outs that would let states skirt key insurance provisions, including safeguards for people with pre-existing conditions and a set of basic, required health benefits.


That reluctance is striking given that “state flexibility” has been at the top of the governors’ health care wish lists for years. It shows the political peril of endorsing a concept that could spike premiums and risk coverage for the sick, including some with life-threatening or disabling conditions.

Once the dust settles — assuming the American Health Care Act makes it through the Senate and eventually reaches President Donald Trump’s desk — that could change, particularly in red states that have been most hostile to Obamacare. Should these Obamacare exemptions survive in the Senate version, Arkansas, Florida, Georgia, Kentucky, Texas, Tennessee and Wisconsin are among those seen as the most likely to pursue them. Governors’ spokesmen declined comment in several of those states.

But for now, state officials are holding back. Governors run the risk of being blamed for abandoning patients with pre-existing conditions if they grab any of these exemptions.

“If you are a state or a governor or an insurance commissioner and you want to start doing this … it’s a microcosm of what Congress is experiencing now,” said Christopher Koller, a former insurance commissioner who heads the Milbank Memorial Fund. "There’s a lot of moving parts. You make [insurance] cheaper for younger people, you make it more expensive for older people.”

Even backers of the legislation in Congress don’t expect many states to take up the options.

“I would guess that most governors, maybe all, don't know, will not seek a waiver," said Rep. Fred Upton (R-Mich.), who wrote the amendment adding more money to the bill that was seen as the key to its eventual passage.

Upton’s home state of Michigan isn’t interested, he said, based on his conversations with Republican Gov. Rick Snyder. Snyder’s office didn’t respond to a request for comment.

Under the House bill, states could request federal permission to get out of three major Obamacare standards. Starting in 2019, Obamacare’s ban on charging sick people more — known as community rating — could be lifted in states that set up a separate coverage program for people with pre-existing conditions. Another option would let states set their own minimum benefit standards in 2020. A third waiver starting next year would let insurers charge older customers more than five times as much as younger enrollees for the same plan.

Republicans are setting aside $138 billion in their repeal bill to help state insurance marketplaces, including $23 billion to fund programs for people with pre-existing conditions in states that take these opt-outs. Several independent analyses have found funding levels would fall well short of what’s needed to actually protect sick patients.

Democrats fear more states would waive insurance rules as Republicans succumb to pressure to lower premiums for healthy people rather than protecting the sick, as the individual market largely operated before the Affordable Care Act.

“I think it might take time for things to get back to that pre-ACA status quo, but I actually think the best evidence we have is what states did when we were in this situation before," said Aviva Aron-Dine with the left-leaning Center on Budget and Policy Priorities. “What they are faced with is intense pressure to bring premiums down for healthy people. And they know it’s coming at the expense of sick people, but that pressure can just become insurmountable."

The exemptions from insurance rules could factor into upcoming gubernatorial races. More than a dozen GOP governors are term-limited next year, and roughly just as many face reelection.

Rep. Jim Renacci, who is vying to succeed John Kasich as Ohio governor in 2018, on Thursday wouldn’t commit to seeking exemptions.

"I don't know if Ohio will even be able to qualify to get it done,” Renacci said on CNN. “But I would look at it."

Regulators who oversee insurance markets in red states — home to some of Obamacare’s biggest antagonists — expressed concern that the House plan would drive up costs for seniors and people with pre-existing conditions.

Allowing insurers to charge sick people more would be “problematic” for people with chronic conditions, said Mike Rhoads, an official in Oklahoma’s Insurance Department. However, he said Oklahoma — where Obamacare rates have skyrocketed in recent years — may look to trim some benefit mandates. But he said the state isn’t seriously examining any exemptions, citing uncertainty about expected changes to the repeal bill.

“I think we’re waiting to see what really is going to happen here," he said.

Some state officials also said they are wary of allowing older enrollees to be charged much more for coverage. Mississippi Insurance Commissioner Mike Chaney, a Republican, doesn’t find the option appealing. "It would penalize the people who need insurance the most,” he said.

In Alaska, which is already seeking federal funds to stabilize its individual market, insurance regulators did not say if they would pursue additional changes. Even in Tennessee, where portions of the state may not have any coverage options next year, top insurance official Julie McPeak expressed only tepid support for the idea.

“I support any flexibility granted to the states to address the needs of our market," McPeak said in an emailed statement before the Thursday House vote. However, she said the state needs more information, especially about funding.

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Very few states would likely grab exemptions immediately. The timeline is “very ambitious” and would require a state to have a “really forward-thinking governor” said Mia Heck, who heads the American Legislative Exchange Council’s health task force. Her group, which has fought Obamacare implementation in the states, is developing model legislation that would empower governors to seek exemptions from Obamacare requirements.

“The timing for this is not great for implementation at the state level,” she said.