Health Care: Washington's Way or the Highway

I haven't always been thrilled with state-level attempts to experiment with heath care policy. But as Tennesse's budget-busting Medicaid expansion showed, those experiments are easier to undo than federal policies. And even the failures can encourage small-scale policy innovation. The PPACA, in contrast, is going to force some states to give up their local policies in favor of federally-defined standardization. Case in point, Utah: Currently the state runs a streamlined health insurance exchange that state officials would like to keep. But they may be forced to scrap it in favor of a bulkier, costlier, federally approved model:

Utah is pushing HHS to allow its health exchange—a relatively bare bones purchasing portal—to serve as the federal bare minimum. The state argues that assigning the exchange too many functions would be too cumbersome for states, deterring many from participating…"We're concerned that they're not only going to want us to facilitate the purchase of health insurance, but also provide a direct venue for accessing public benefits and enforcing the mandate," Robert Spendlove, Gov. Gary Herbert's policy director, tells PULSE. "We don't know yet what they intend to require but what we would like is for Utah to be defined as the federal minimum standard."

The Utah exchange is much smaller than the country's other exchange, the Massachusetts Connector, which is an online resource for purchasing coverage. Utah's has four dedicated employees and a yearly budget of $500,000; and leaders in Utah want to keep it that way. They wrote in comments to HHS last week that the federal agency "needs to resist the temptation to expand federal authority over state exchanges so long as the functions described in federal statute are met."

State government officials are working to implement the law in many cases because they have little other option; better to go ahead with planning rather than wait for the political battles to play out before acting. But there are a number of governors and gubernatorial candidates who have been fairly vocal about their opposition to the la and their frustration with the way it's likely to affect the states.

Back in August, The Wall Street Journal reported Indiana Governor Mitch Daniels' take on the law as follows: "The bill raises almost 1,000 questions and so far they have zero answers…This is going to be a nightmare, and you would think [Health and Human Services Secretary Kathleen Sebelius'] gubernatorial experience would have given her a good intuition for that." That same month, Minnesota Governor Tim Pawlenty called the law "an intrusion by the federal government into personal health care matters and…an explosion of federal spending that does nothing to make health care more affordable."

And even Rory Reid, son of Senate Majority Leader Harry Reid and Democratic candidate for governor of Nevada, is now worrying that the law's Medicaid burden could end up negatively impacting the state's budget.

As the Galen Institute's Grace-Marie Turner told me earlier this year, when it comes to implementing the health care overhaul, states can expect to be told what to do and how to do it. "States will not be able to do it their way," she said. "They'll have to do it Washington's way."

Much more on ObamaCare and the states here.