Michael Leavitt has profited from Obamacare. So what?

It did not take long for Michael Leavitt, Mitt Romney’s head of newly picked transition team, to come under fire as an “Obamacare profiteer.” His consulting firm, Leavitt Partners, works with states to set up health insurance exchanges, the marketplaces that must be up and running by 2014.

Leavitt’s firm has undeniably boomed alongside the Affordable
Michael Leavitt, chairman of Leavitt Partners, has been picked to lead Mitt Romney’s transition team. (Bloomberg) Care Act; his staff doubled to handle all the new business that’s been coming in lately. But that Obamacare-fueled boom does not necessarily put Leavitt’s work out of step with his party. The majority of what Leavitt’s firm does is work with the Republican-governed states that have accepted millions to plan for Obamacare’s insurance marketplaces.

Over the past two years, the Obama administration has handed out a little over $1 billion in health insurance “establishment grants,” multimillion-dollar awards that give states the resources to a health insurance exchange ready by 2014. Via Governing Magazine, here’s where those have gone in map form (interactive version here):

Those pink states are the ones currently party to the Supreme Court case challenging the health reform law that have, at the same time, accepted multimillion-dollar grants to plan for health insurance exchanges. Together, they’ve accepted $220 million in health exchange establishment grants.

Those pink states are also a lot of the ones that Leavitt’s consultants spend a lot of time in, with Republican governors who see themselves in a bit of a health insurance exchange bind. As Leavitt put it to me in an interview last year, he hears a lot from governors facing an uncomfortable choice. If they set up a health insurance exchange, they would be implementing a law they really didn’t like. But if they sat idle, and refused to do so, the federal government would come in and take over the task.

Many were choosing the latter option.

“There is a group that feels as though they don’t want to be associated with the Affordable Care Act,” he said. “Privately, though, it’s clear that several of those are planning behind the scenes, because they don’t want to have a federal exchange.”

Some have questioned a seeming conflict between Leavitt’s work and Romney’s promise to repeal Obamacare should he become president. The two don’t necessarily collide. Leavitt has, in speeches, made the case that states should set up health insurance exchanges regardless of the Affordable Care Act. He describes the marketplaces as a “practical solution to a problem that needs to be solved.” Moving forward on that goal isn’t necessarily inconsistent with supporting the health overhaul’s repeal.

Leavitt Partners has certainly grown thanks to the health reform law — and to demands from Republican governors, who want to figure out how to work within the bounds of a law they don’t like. These are states like New Mexico, which awarded Leavitt Partners a $1 million contract last week to work in its exchange. Without grants like that, coming from Republican-governed states, Michael Leavitt wouldn’t have much of a consulting firm at all.