Tuesday, October 6 , 2015, 8:43 pm | Fair 64º

Lou Cannon: With Obamacare, Republicans Face Dilemma Between Repeal and Helping It Succeed

Stakes — and risks — escalate as U.S. Supreme Court prepares to take up constitutionality of new law

By Lou Cannon, State Net Capitol Journal |

Republican presidential candidates and GOP lawmakers are eager to repeal the Affordable Care Act (ACA) that President Barack Obama pushed through Congress on a party-line vote in 2010. But their Republican counterparts in the nation’s statehouses are torn between resisting what they call “Obamacare” and making it work.

“The sands in the hourglass are slipping away across the country,” Alabama State Rep. Gregory D. Wren, R-Montgomery, recently told The New York Times.

Wren, co-chairman of the health reform task force of the National Conference of State Legislatures, was referring to the narrowing window available to states for creating the health insurance exchanges that are a centerpiece of the federal law. The exchanges would be online supermarkets in which uninsured individuals could shop for a health plan. As envisioned, government subsidies and competition among insurance companies would make the health plans offered on the exchanges more affordable than current plans. Through these exchanges and expansion of Medicaid, the federal-state plan that provides health care for the poor, the Obama administration hopes to insure 30 million of the approximately 50 million Americans who lack health insurance.

The states, however, face a practical problem; if they fail to present a plan to set up the exchanges by Jan. 1, 2013, the law allows the Health and Human Services Department to create federal exchanges over which the states would have no control. Wren cited this prospect, opposed by governors of both parties, in introducing HB 245, a bill to set up an Alabama exchange. But in a pattern repeated in several Republican-controlled states, the bill stalled because Gov. Robert Bentley wants to wait until the U.S. Supreme Court rules on the constitutionality of the health-care legislation. The high court is scheduled to hold three days of hearings on the law beginning March 26, with a ruling expected by July 1.

There’s a case to be made for waiting. But as various foes of the ACA, including Republican Gov. Tom Corbett of Pennsylvania, have pointed out, waiting also entails risks. Setting up the exchanges is no easy matter, and the plans states are required to submit by the Jan. 1 deadline are supposed to include a standardized application form and a consumer-friendly online presentation. HHS on March 12 issued a 642-page document providing guidance for the states on the exchanges and granting flexibility on the minimum requirements of a health plan.

Even so, setting up the exchanges will take time. Massachusetts and Utah, the two states with functioning exchanges under state laws, took nearly a year to make them operational. The Massachusetts exchange started in 2006, as the product of a law proposed by then-Gov. Mitt Romney, who as the leading Republican candidate for president now promises to repeal the federal law, which was largely modeled after his Massachusetts plan.

The Obama administration has given states financial incentives to create exchanges; HHS has doled out $600 million to 34 states that have done preliminary spadework plus a $1 million planning grant to every state. A dozen states and the District of Columbia have fully embraced the federal law with laws or executive orders creating state exchanges.

California, the first to implement the federal law by creating the California Health Benefit Exchange, is especially advanced. If the Supreme Court invalidates the federal law, California is positioned to launch its own health-care system should Democratic Gov. Jerry Brown and the Legislature decide they want one.

At the other extreme, a dozen states, notably Florida and Texas, have refused to spend their own money — or accept federal funds — to build the exchanges. Several other states, like undecided voters, don’t know which way to turn. Most have taken small steps and are running in place until the court rules.

There is a partisan overlay to this activity or lack thereof. With the exception of Nevada, the states that have done the most to implement the exchanges are governed by Democrats, and the states that have done the least have Republican governors. But many Republicans are conflicted. In Michigan, Republican Gov. Rick Snyder proposed an exchange that stalled in the Republican-controlled House. In Wisconsin, Republican Gov. Scott Walker issued an executive order creating an exchange and then, under pressure from conservatives, canceled his order. In Pennsylvania, Corbett opposes the health-reform law while following the Boy Scout maxim of being prepared. He has accepted $34 million in federal funds to build an exchange.

Republicans such as Corbett and Wren believe states that wait until the Supreme Court rules are fooling themselves. If the law is upheld, they will have to scramble to meet the Jan. 1 deadline. It’s also possible — perhaps likely — that the exchanges will survive a ruling that strikes down the most disputed element of the 905-page law: a requirement that all uninsured Americans purchase health insurance. Legal analysts disagree about whether the high court will find this mandate constitutional, but most doubt that the court will invalidate the entire law.

Insurance companies, divided during the congressional debate over the law, prefer state to federal regulation and generally support creation of the state exchanges.

“We hope the law is ruled constitutional in its entirety,” said Tom Epstein of Blue Shield of California, a large nonprofit insurer that has long favored state exchanges. Insurers will benefit if the law is upheld because they will receive federal subsidies for people who purchase health plans through an exchange.

And what if the Supreme Court rejects the mandate requiring purchase of health insurance while leaving the rest of the law intact? It’s been widely forecast that such a ruling would sound the death knell for Obamacare, as it would remove the principal financing source for subsidizing the exchanges and the expansion of Medicaid.

But a mandate may not be the only recourse. Kim Belshe, a high-ranking health care official for two previous California governors, suggests that insurance companies, aided by federal subsidies, could induce the uninsured to purchase health insurance by offering low-priced plans during their annual open-enrollment months. Belshe is now a director of the California Health Benefit Exchange, whose executive director, Victor Lee, calls the mandate “just one tool in the kit” of reforming health care. Although it’s a tool he wants, Lee says that “a revolution in health care” will continue in any case. This revolution, if that is what it is, is driven by the costs of health care, which are more expensive in the United States than in any other industrialized nation in the world.

The American people, like their representatives, have been divided on the merits of the federal health-care law ever since it was passed. A recent Gallup Poll found that 45 percent of Americans thought the law a “good thing” and 44 percent “a bad thing.” (Interestingly, a vast majority — 72 percent — believes that requiring individuals to purchase health insurance is unconstitutional.)

Because of this division, the political debate over health care is likely to continue no matter what the Supreme Court decides. It is also likely that insurance exchanges will proliferate, with or without the mandate. Corbett and Wren are right in saying that it makes good sense for the states to be prepared.

— Summerland resident Lou Cannon is a longtime national political writer and acclaimed presidential biographer. His most recent book — co-authored with his son, Carl — is Reagan’s Disciple: George W. Bush’s Troubled Quest for a Presidential Legacy. Cannon also is an editorial adviser to State Net Capitol Journal, which published this column originally.

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» on 03.21.12 @ 06:29 AM

Of course, Blue Shield loves Obamacare. People would now have to buy insurance from them and the taxpayer would have to subsidize it. The perfect business model for a company. Unfortunately, this law is another massive entitlement program which will hasten the day our country becomes insolvent. We might as well just all hold hands and sing Kumbaya as we drive off the cliff together.

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