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Health Care

State Net Capitol Journal: Obama Election Win Leaves GOP Governors Scrambling on Affordable Care Act

For most of the last year, a handful of Republican governors have refused to take action on implementing the Affordable Care Act, preferring instead to bank on the Supreme Court or the November presidential election to send the law to the legislative junk heap. But with all such options now exhausted, states must finally - and quickly - decide how they will go about putting the law into effect.

Cheryl Smith, a director at Leavitt Partners, a health consulting firm founded by former Utah Governor and U.S. Health and Human Services secretary Michael Leavitt, says governors now have no choice but to lead the way in the law's implementation.

"The folks who need to re-strategize at this point are going to be the Republican governors, for the most part," Smith told the Washington Post last week. "They can't just say no anymore. They have to accept that the Supreme Court ruling was what it was and that the status quo is not sustainable."

The most immediate part of that re-strategizing involves whether the states will run their own health benefits exchanges. Under the ACA, states can follow any one of three paths: running their own exchange with a generous helping of federal dollars to set it up; partnering with the federal government to set up and run an exchange; or opting to have the feds do it all for them. States have until Nov. 16 to decide which way they intend to go.

To date, about 14 states and the District of Columbia have opted to run their own exchanges. According to a report released last week by health care consultant Avalere Health, that number will grow to 20 states by next October, when the exchanges are required to begin enrolling consumers. Another 13 will choose the partnership model, while the rest will at least initially allow the federal government to run it for them.

Virginia Gov. Robert McDonnell (R) said last week that his state will go with the federal model, with the understanding that it might eventually move into a partnership or run its own exchange down the line.

"I don't want to buy a pig in a poke for the taxpayers of Virginia," he told reporters at a post-election news conference. "At this point, without further information, the only logical decision for us is to use the federal option."

Given the technical, structural and regulatory complexities of setting up an exchange, it might already be too late for many states to do anything else. California, for instance, began work on its exchange within months of President Obama signing the ACA into law in March, 2010. While the Golden State is by far the most advanced of any state in its development, it is still only 75 percent along in the process. Alan Weil, executive director of the National Academy for State Health Policy, told last week he doubts states that haven't already started creating an exchange will be able to meet the January 1, 2013 deadline for showing they are on track to begin enrolling consumers by next October.

"They have not taken enough steps even if they change their minds," he said.

Exchanges are not the only issue: states must also decide whether to go along with the ACA's Medicaid expansion. The law originally required states to open up their Medicaid rolls to anyone with incomes at or below 133 percent of the federal poverty level, providing coverage to around 16 million U.S. residents currently without health care insurance. But the Supreme Court's June ruling that upheld the bulk of the law also struck down that requirement, instead making it optional. States that opt to go along will be reimbursed at 100 percent by the federal government for the first three years, after which they will be responsible for 10 percent of those increased costs.

To date, at least six governors have said they will not expand their Medicaid rolls. But whether GOP stalwarts like Florida Gov. Rick Scott, Texas Gov. Rick Perry, Wisconsin Gov. Scott Walker, Georgia Gov. Nathan Deal and Kansas Gov. Sam Brownback will hold fast to that line remains to be seen. Some are already being lobbied to change their position.

Linda Sheppard, health division director for the Kansas Insurance Department, says her department will soon be making an effort to convince Brownback to at least consider a partnership model. She says they have a partnership application ready to submit in case they can convince him to go along.

"We will be reaching out to the governor to talk about, what does he want to do now," Sheppard told the Washington Post last week. "We need to know whether he wants to have the commissioner go ahead and submit our letter by November 16."

Similar efforts are likely to follow in other states. Kansas Insurance Commissioner Sandy Praeger recently told Kaiser Health News that she believes Brownback will opt for the partnership. She also believes several states will at least try to negotiate smaller Medicaid expansions than what the ACA currently calls for. Either way, she expects states to act very soon.

"I expect to see a lot of activity between now and Nov. 16," she said. "States will look at this more pragmatically to keep their options open." (KAISER HEALTH NEWS, WASHINGTON POST, ATLANTA JOURNAL-CONSTITUION, STATELINE.ORG, RICHMOND TIMES-DISPATCH, TOPEKA CAPITAL-JOURNAL, THE HILL, POLITICO, TAMPA BAY TIMES)

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