Republican governors scramble over next Obamacare steps

Kansas Gov. Sam Brownback (R) is still deciding how his state will handle the Affordable Care Act.  (John Milburn -- AP)

Republican governors are scrambling to figure out what to do about health reform, now that President Obama has won reelection and there's no stopping the Affordable Care Act. 

At least a half-dozen Republican governors vowed not to implement the health-care law until after the November election. "I will make that decision number one after the election," Alabama Gov. Robert Bentley told a local television station in September.

New Jersey Gov. Chris Christie said in late October, "I'll make decisions when I have to."

States face a Nov. 16 deadline to inform Health and Human Services whether they will create a health insurance exchange, the new marketplace that each state will have in 2014. 

"The folks who need to re-strategize at this point are going to be the Republican governors, for the most part," said Cheryl Smith, a director at Leavitt Partners, the health consulting firm founded by former Health and Human Services secretary Michael Leavitt. "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."

They have three choices. States can run their own insurance marketplace, using federal funding to set up the technology to allow consumers to compare and purchase health plans. They can leave the task to the federal government. Or, they can do something in between: A "partnership" model allows state and federal governments to divvy up the responsibilities.

The insurance regulators in Kansas, a Republican-led state, would like to add their name to that list. There, the insurance department has prepared an application that would create a "partnership" exchange in Kansas, run with cooperation with the federal.

The uncertainty, now, is over whether Gov. Sam Brownback will approve the blueprint. 

"We will be reaching out to the governor to talk about, what does he want to do now," said Linda Sheppard, health division director for the Kansas Insurance Department. "We need to know whether he wants to have the commissioner go ahead and submit our letter by November 16."

A Brownback spokeswoman said that the governor's office is still "discussing options and alternatives" to the Affordable Care Act. “The people of Kansas have spoken loudly three times, they want us to pursue Kansas solutions," said press secretary Sherriene Jones-Sontag. "We are discussing options and alternatives with like-minded states and with our legislative partners in Kansas.”

Sheppard said she saw internal e-mail lists, made up of state health officials across the country, "light up" early Wednesday morning as regulators wondered what would happen next in their state. 

"A number of states are trying to get themselves situated so that they can do a partnership exchange," she said.

Some states are already on track to run their own health insurance marketplaces. That includes Mississippi, which has long committed to running its own exchange. Phone calls started coming into Mississippi insurance commissioner Mike Chaney's office hours after  Obama's victory, asking for advice on how to best proceed.

"I talked with several other commissioners the day after the election," Chaney said. "I've told all of them that we're very willing to share everything we've done. I would say I understand the dilemma faced by my other colleagues."

Chaney said he will submit Mississippi's plan to run a health insurance exchange to Washington as soon as Monday.

In states that have shown some of the staunchest opposition to the Affordable Care Act, private industries are pushing for more cooperation with the federal government. That includes Florida, where Republican Gov. Rick Scott has repeatedly refused Affordable Care Act funds. 

"We're going to be lobbying on the issue," said Patrick Geraghty, chairman and chief executive of Florida Blue, the nonprofit insurance carrier. "I certainly don't think it's a dead issue in the state." Geraghty would like to see Florida run its own health insurance exchange. Local regulation of the insurance industry, he argues, would be more responsive to Floridians' needs.

Although Florida could potentially start on a federal exchange and then transition into a state-run marketplace, Geraghty said he believes that process would be messy and complex. "I'm hopeful that in Florida, cooler heads will prevail and allow us to have some time to talk about this," Geraghty said. "Anybody who has moved large-scale systems knows that's a really big lift. It's really in the best interest for Florida to do this."

States are working on a tight timeline: After the Nov. 16 deadline, they face another checkpoint on Jan. 1, when they have to demonstrate that their marketplace is on track to begin enrolling people in one year. 

"If were a governor, I'd be less concerned about the November deadline," Leavitt's Smith said. "I would be focused on the actual deadline, in January, to show you can make this work."

With benchmarks looming, and the election barely hitting rearview mirror, many Republican governors seem to be in the middle of weighing the best next steps.

“For Virginia, the legislature must make the final call regarding the establishment and ultimate structure of a health benefits exchange," said Jeff Caldwell, press secretary for Gov. Bob McDonnell. "Virginia will continue to seek information from the federal government and will look to ensure that decisions made will be in the best interest of Virginians and all involved partners.”

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Brad Plumer · November 8, 2012