Sorry, ObamaCare: Most State Governments Just Aren't That Into You

It's been two and a half years since the president's health care bill passed, and we're still finding out what's in it. It turns out, for example, that the state-based health insurance exchanges the law was expected to set up may not end up being run by the states.

The Washington Post notes a new report indicating that just 13 states and District of Columbia have officially said they're going to set up their own exchanges. The rest remain either uncommitted or outright opposed. And even those states who have opted in may not actually get their exchanges up and running by October 2013, when enrollment is supposed to start. 

What's the hold up? For one thing, it turns out to be more of a pain in the you-know-what to set up these exchanges than the law's authors expected:

When the law passed, many experts predicted that the vast majority of states would set up their own exchanges. The exchanges are a critical piece of the health law, a resource aimed at helping millions of uninsured Americans find private plans, get government subsidies or gain access to Medicaid, the state-federal program for the poor and disabled.

The experts believed states would want to tailor the exchanges to their own populations. But the task has proved exceedingly complicated. Participating states must set up a call center as well as a Web site that allows people to easily find and understand health plans, in much the way that Orbitz and Travelocity help people find airline flights.

That's right: computer trouble. The policy geniuses behind the law turned out to be a lot better at imagining all sorts of new-fangled web 2.0 socially mediated user engagement tools (or whatever the kids do on the Internet these days) than at actually building and connecting the sorts of complex, interoperable databases that are required to make this thing work. Reason readers were warned about technical problems facing exchange creators, and other issues facing states tasked with setting up exchanges, at least two years ago, but some of the rest of the world is apparently just catching on. 

States are opting out because the law is a mess and it's easier to let the feds handle it. And because they can. Under the law, setting up the exchanges is optional. It's just that any state that declines was told to expect the federal government to step in and run an exchange without any input from the state. That was supposed to be an incentive for states to build and run their own exchanges—or perhaps a threat, for those less inclined to be excited by the Sim Health-like challenge of running their own health insurance exchange.

But it's looking more like an empty threat. In a bit of a head-scratcher, the law's authors kind of forgot to dedicate money to setting up the federal exchanges. They also irritated their own supporters by including langauge saying that the law's subsidies for private insurance can only be accessed through state-based exchanges, which more or less knee-caps the federal exchanges, which are supposed to be the vehicles for the law's insurance subsidies.

Supporters of the law say this has to be a glitch, a mistake. But all signs indicate that it was very much intentional. Every previous version of the law included the same language. And the only statement of intent in the legislative record is by Democratic Sen. Max Baucus, who explained prior to the law's passage that the subsidies were intentionally made available only to states in order to incentivize them to create exchanges. Like much of the law, it doesn't seem to have worked.