Many Governors Veto State-Run Health Care Exchanges

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Last week saw an important milestone on the road toward implementing the Affordable Care Act, a.k.a. Obamacare: Friday was the deadline for states to let the Department of Health and Human Services know whether they’d be setting up their own health care exchange, or wanted the federal government to do it for them.

The exchanges required under the ACA are online marketplaces where people needing to buy health insurance can compare the options available in their state and purchase a plan. As many as 30 million people are expected to buy health insurance through the exchanges, which are scheduled to be up and running in all states in 2014.

President Barack Obama and Health and Human Services Secretary Kathleen Sebelius in Feb. 2012. (AP Photo/Pablo Martinez Monsivais)

Secretary of Health and Human Services Kathleen Sebelius wrote on the Department’s blog that as of last week’s deadline, 18 states and the District of Columbia had applied to set up their own exchanges. The other 31 states will either partner with the federal government to create an exchange, or allow the federal government to implement an exchange for them.

Many of the governors who spoke out against state-operated exchanges were Republicans, and many said they were not given enough information to submit a plan by last week’s deadline. In a statement rejecting the state option, Virginia’s Republican Governor Bob McDonnell complained about a “lack of details and certainty about the states’ ability to receive the necessary flexibility, control and funding of their own exchanges.”

New Jersey’s Chris Christie cited similar reasons for vetoing legislation that would have created a health care exchange in his state. “I will not ask New Jerseyans to commit today to a State-based Exchange when the federal government cannot tell us what it will cost, how that cost compares to our other options, and how much control they will give the states over this state-financed option,” Christie wrote.

New Jersey Gov. Chris Christie answers a question during a news conference in Trenton, N.J., Dec. 7, 2012. (AP Photo/Mel Evans)

Christie waited to veto the legislation for almost two months, from October, when the Democrat-controlled legislature sent it to him, until December. His pause caused concern among groups like the conservative PAC Americans for Prosperity, which ran ads pressuring him to veto the exchange, and lauded governors in other states when they refused to participate.

As a director at the U.S. Department of Health and Human Services, Jay Angoff led insurance reform efforts during the first year that Obamacare was a law. He says that while the Department could have done more to communicate with governors, in many cases it was politics not policy that determined whether governors chose to create health insurance exchanges for their states.

“I don’t think that any additional guidance would have made a difference in the decisions that these governors are making. Clearly the decision to allow the federal government to operate the exchange is a political decision. It’s not based on the merits, it’s purely based on ideological opposition to the Affordable Care Act.”

In Missouri, the Republican-dominated state legislature went so far as to place an initiative on the November ballot prohibiting the Democratic governor, or any other state entity, from creating a state-run exchange and from cooperating with the federal government on an exchange — unless the governor was given permission from the state legislature or through a voter referendum. The ballot measure passed and Missouri Governor Jay Nixon was unable to apply for a state-run exchange.

Conservative governors, some of whom head America’s least-insured states, have also been resisting the ACA by opting out of the Medicaid expansion, an element of the law that, if every state opted in, would extend health insurance to 21.3 million people by 2022.

The irony of many conservative governors’ decisions to opt out of creating their own state-run health care exchange is that, by refusing to take any part in advancing Obamacare, the governors handed control of their states’ markets over to federal agencies — an action that goes against conservatives’ traditional resistance to big government.

Recognizing this contradiction, the Republican Governor of Idaho, C. L. “Butch” Otter, chose for his state to craft its own exchange. “Our options have come down to this,” Otter wrote. “Do nothing and be at the federal government’s mercy in how that exchange is designed and run, or take a seat at the table and play the cards we’ve been dealt. I cannot willingly surrender a role for Idaho in determining the impact on our own citizens and businesses.”

States that did not submit a plan to operate a state-run health care exchange by last week’s deadline can still partner with the federal government in developing an exchange. The deadline for forming that partnership is February 15, 2013.

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  • JonThomas

    All political ironies aside, with the current information that has been disseminated it’s tough to find fault with the states for not establishing their own exchanges.

    As a citizen, other than the basics of being practically blackmailed to buy my own insurance through private enterprise, or otherwise face a penalty, neither I nor any of the people I know, have little idea about how the ACA will function. I would hope that states have been given good counsel and advise, more than what us common citizens have been supplied, but that is not to be assumed. The position of Idaho’s Governor is also completely understandable.

    That said, whether it turns out to be through their state exchanges, or through the federal government, every single person should apply for financial assistance. If that assistance is denied, each person should refuse to buy insurance! Such an action would be a resistance against the insurance companies and the type of government that would hand over freedom by enslaving citizens to private and public corporate interests.

    If a government requires it’s citizens to have health care insurance then it should, in the same vein as education, supply such healthcare insurance. If any citizen should want a private insurance option, in lieu of publicly funded insurance, they should be free to choose whatever insurance they desire. Again, in the same vein as education, each person choosing a private insurance plan should be free to choose such an option without any hindrance or prejudice!

    It’s one thing to pay taxes in support of government institutions, that’s a moral act. It’s quite another to be forced under threat of penalty to support private enterprise…that’s slavery.

    In effect.. the penalty is only levied against those who choose to be free of another person’s or entity’s appropriations for personal profit. This is slavery. It’s the same as saying…’if you move off a beneficiary’s land, refuse to pay him rent, or refuse to work to the profit of such a beneficiary, you will be penalized!’

    Freedom from slavery means the freedom to choose one’s fate, emancipated from anyone profiting from your life or your work without your consent.

    Under the ACA, even those whose insurance premiums are to be covered under a state assistance plan are subject to the slavery enforced through publicly funded assistance paid out to the insurance companies. No one, not any citizen, nor the government itself, should be required by law to have their life and existence become fodder for another person or entity’s profit.

    Taxes, which fund government institutions, are moral because they provide a service through which the tax payer profits. Forced enrichment of non-governmental institutions which profit individuals or non-governmental institutions, either through direct payments or state funded proxy assistance programs to such private enterprises is exactly the Immoral slavery of which I described!

    If a State, or the Federal Government should try to attach a penalty to
    any person’s taxes for not carrying insurance, I feel it would be the
    moral duty of each citizen to stand against cronyism. Perhaps by
    establishing a new, citizen centered, check and balance…it would be
    morally righteous to refuse to submit to the burgeoning corporate state.
    Each person should consider not paying the ascribed penalty! Choke out
    the parasites by not feeding them! Force the politicians to choose options other than those promoted by special interests!

  • Jc Dufresne

    Which is why progressives rightly demanded “Medicare for All” or at least the “public option” but unfortunately our legislators like Max Baucus are owned by monied interests. It’s past time for publicly funded election campaigns to take the money out of the mix.

  • Scott

    I’m glad to see Republicans stepping out of the way so adults can govern.

  • Anonymous

    This is actually good news, by giving up their right to set up a state run exchange the governors are handing over control to the federal govt. The larger the federal exchange the lower its premiums will be for individuals, states that do set up their own exchanges will realize its cheaper to merge with the federal exchange than run their own, leading to a single payer system.

  • Ty Rant

    As the well hidden and widely denied facts slowly leak it becomes clear that the “affordable care act” is and never was appropriately named. It is anything but affordable for anyone who isn’t getting it for free and at the substantial cost of everyone else. This is one massive wealth distribution scheme disguised as “the right thing” by the left. Were it not a disaster Obama, Pelosi, Reid, et. al. wouldn’t need to let campaign contributers claim immunity from it. Thank goodness for states rights and for those who have sense enough to fully appreciate their value.

  • AllanBlack

    I am not sure why we should be paying for someone to get
    financial assistance for health care if they can afford to pay something
    towards their own care. Usually, these assistance dollars are paid by someone
    else, namely tax dollars and I don’t feel like paying for someone; especially
    if they can pay something towards their own care. Now there are several people
    that I fully expect to take care of; the poor, disabled, elderly, persons on
    social security as; money paid from my labors goes towards their retirement, as
    mine will be supported by the young when it is my turn to retire. So I am all
    for anyone’s freedoms to not have to pay for insurance. I think that anyone
    that chooses not to pay anything towards their own care should have a card in
    their wallet stating that they chose not to have insurance. It should be a
    mandatory carried card so that first responders know how to proceed at an
    accident site or crisis situation. Say the uninsured by choice is involved in a
    slip and falls incident and is severely injured on the sidewalk. He is
    unconscious and bleeding profusely. The first responders arrive and check the
    person’s card stating that he made a choice not to carry insurance. The card
    includes an emergency contact number to a family member so; the first responder
    administers no treatment, calls the family member and asks if they wish to be
    financially responsible for him lying unconscious on the sidewalk. If they reply
    affirmatively, the first responder waits till the family member’s arrival with a
    credit card guaranteeing a $100,000 deposit for his potential treatment costs for
    the ambulance ride, hospital stay, medical treatment and any subsequent
    rehabilitation. After all, he may have a severe closed head injury, requiring
    long term rehabilitation. If the family member chooses not to be responsible,
    they are still required to pick him up in whatever condition he is in. Maybe
    they have already contacted a place for the organ donations that could occur
    upon his death.

    We will all get along much better if we follow the extreme
    line of thinking. By making government so small, that you can drown it in a
    bathtub, it’s each man for him self. Then, you have to continue to allow
    corporations to run amuck, and let them pay people as little as possible so,
    they can continue to make obscene profits. If the companies engage in nefarious
    practices, they always have the taxpayer that they can stick it to for bailing
    them out. If the companies engage in hiding money offshore, from all of the
    jobs that are farmed out overseas, we grant them a tax holiday so they can
    bring money back in to our country, tax free, so they can buy back enough stock
    in the company to regain controlling interests. Or; they buy other companies
    with the profits, load them up with debt like the presidential running mate
    did, lay people off and sell off the assets so that they can take the profit
    out of the company. Then they stick it to the taxpayers in the form of
    guaranteeing the pensions of all of the laid off people, with the pension
    guaranteed fund that pays fifty cents on the dollar to the retirees. That’s the
    American way folks. Screw up the little guy and develop a net worth of a couple
    hundred million dollars and focus on the fact that the president cannot find
    his birth certificate. Imagine if the wealthy guy was in charge today, who
    would be the masters. It scares me to think of it. I already saw his plan. They
    only focus on the deficit when a Democrat is in the office. What’s amazing is
    that their policies are what pushed us in to a deficit. Granted, all of the
    obstructionism that has occurred to insure that Obama was going to be a one
    term president did not do much for getting our country back on track. Programs
    for jobs, veterans, and middle class continued to be obstructed at every level
    possible so that they could say; “See what little he has done. Boy do we have a
    plan for you.” These companies pay minimal wage, hire people part time so they
    get out of paying for any benefits, lay people off so it shows the board that
    they are saving money so their bonuses increase, etc. Whoever said we are our
    brother’s keepers is a sucker and the sooner that we line our thinking with Ayn
    Rand the better this country will be.

    Right now we are incarcerating people in record numbers in
    private prisons. They are engaging in manufacturing jobs that used to be
    covered by these Middle Class People who belonged to these things called
    Unions. Imagine being forced to pay for a stupid group that works to insure
    that you get a decent and living wage. Laughable. Unions used to fight for
    these things called days off, vacations, sick time, etc. Every state needs to
    be a Right to Work state so these CEO’s can go back to the old ways of having
    indentured servants. Imagine that, paying enough money to give someone a pension
    to live on. Disgraceful. Better to give that money to a CEO that really earned
    it by insuring that the little guy gets nothing. Any way, let’s get back to the
    prison manufacturing jobs. These private prisons are doing Shawshank Redemption
    type scenarios. Remember that? They had scams on top of scams on top of scams
    and the warden always was on the receiving end of the honey pot. These private
    prisons are undercutting everyone in the real world and paying inmates $0.97 –
    $4.90 per day to manufacture everything possible. That’s one way of getting the
    jobs back from the Chinese. They cannot compete with our slave labor
    competition so the jobs are coming back to the good old USA. Never mind
    that they have to keep coming up with the slaves to provide the labor. So they support;
    “three strike your out laws”, tougher immigration laws to incarcerate illegals,
    Draconian drug laws, etc. Never mind that we have become the most incarcerated
    country in the world. These private prisons just offered to buy prisons in 48
    states with a guaranteed management contract of 20 years along with a
    guaranteed occupancy rate of 90%. So no matter if we become more lenient on the
    failed War on Drugs, judges will have to continue filling the prisons for 20
    years at 90% occupancy. Imagine how bad that will be for our economy if we are
    not paying Middle Class people decent wages anymore, we continue down the path
    of the have’s and have nots, and we continue to allow indentured servitude.
    Right now we spend on average of $12,000 per year per student and $30,000 per
    year per inmate. Yes folks, let’s continue to incarcerate people fueled by a prison
    industrial revolution. Go to the website and read “ALEC Exposed” and see
    who is controlling the country today. Then tell me you are free.

    The ACA was poorly sold, but will keep prices in check
    because it states that insurance companies have to spend 85% of premiums on
    health care. They will get richer than all get out because Obama allowed the
    capitalist insurance companies be the places you had to buy your insurance from.
    What the insurance company’s are mad at is someone is telling them how much
    profit they can make. If I am paying for a product called health care
    insurance, I would at least like to know that the majority of my premium is
    going to pay for the services I paid for. Not to have 25 – 30% administrative
    costs so, the insurance companies can get richer, by denying me the service
    that I paid for.

    So Uninsured, don’t make me pay for your care and you and I
    will get a long fine. I own a company and pay a significant amount of money to
    cover our employees. I plan to continue covering them when the ACA comes out in
    full force. I believe I have an obligation to our employees and I believe that
    I am responsible to pay for my care as well. But spare me when we want to talk
    about slavery. Most of us are slaves today. Our mortgages are upside down,
    banks; left unregulated, played with our money and lost, no one went to prison;
    these same people are in charge and want to be able to do it again. While they
    are sticking it to us with this hand, they are playing the little shell game
    with the other. I always laugh when I see Fox News on at businesses as it is
    24/7 propaganda paid for by a wealthy billionaire with an agenda. News used to
    come to us with Walter Cronkite at 10:00 every night. It was objective, the
    guys had honor and they reported on the news. The guys on Fox are not even
    reporters. They are highly paid actors pitching a script to support a right
    wing extreme agenda. Get some critical thinking going, open your eyes or, we’ll
    all be indentured servants; “Owing our souls to the company store.”