By ABBY GOODNOUGH | Published: September 23, 2012 | New York Times
PHOENIX — Like many Republican governors, Jan Brewer of Arizona is a stinging critic of President Obama’s health care law. When the Supreme Court upheld it in June, she called the ruling “an overreaching and unaffordable assault on states’ rights and individual liberty.”
Given that the health care overhaul remains a lightning rod — just last week, Oklahoma revised a lawsuit against it — even the most tentative discussions about carrying it out in Republican states tend to take place behind closed doors or “underground,” as the leader of a health care advocacy group in the South put it.
In Mississippi, Mike Chaney, the insurance commissioner, who is laying the groundwork for a state-based exchange there, recently learned the difficulties of moving forward in anything but the utmost secrecy. At a luncheon this summer he found himself facing down an opponent of the law in a confrontation that is now circulating on YouTube.
“I was invited to the picnic, and I was the main course,” said Mr. Chaney, a Republican and an elected official.
The law requires all states to have exchanges, which are essentially online marketplaces where small businesses and individuals can shop for private health plans, in place by January 2014, when a requirement takes effect for most Americans to have health insurance or pay a penalty. If states fail to submit plans for running their own exchanges by the deadline, the law calls for the federal government to set up and run one for them, with or without their help. People with incomes between 133 percent and 400 percent of the poverty level can get federal tax subsidies through exchanges to make the price of coverage more affordable.
“If we have to have one,” said Donald Hughes, Ms. Brewer’s health care policy adviser, “then it would be better for Arizona to do it ourselves rather than defer to the federal government.” He said, however, that Ms. Brewer would not make a final decision on a state-run exchange until after the election.
Only 13 states and the District of Columbia have formally committed to running their own exchanges. All of them but Rhode Island, whose governor, Lincoln Chafee, is an independent, are led by Democrats. The Republican governors in six states — Alaska, Florida, Louisiana, Maine, South Carolina and Texas — have said they will not create a state-run exchange, according to the Kaiser Family Foundation. So has New Hampshire, where Gov. John Lynch, a Democrat, faced opposition from the Republican-controlled legislature.
Most of the remaining states, 22 of them run by Republicans, are exploring their options. Along with Arizona, at least three of them — Mississippi, Nevada and New Mexico — have done enough planning to meet the November deadline should they decide to run their own exchanges, according to officials. Nevada has already created its exchange, appointed its board and hired its executive director. Most Republican governors, including Ms. Brewer, are waiting for the outcome of the presidential race before making a final decision; Mitt Romney has pledged to repeal the law if elected.
But states like Arizona say they want to be prepared in case the law survives. (Even if Mr. Romney wins, repealing the law will require Congressional approval, which will be difficult if Democrats retain control of the Senate.)
Peter Lee, the executive director of the insurance exchange in California, said he had attended meetings with officials from red states who were eager to keep their presence under the radar.
“It’s sort of like A.A.: ‘My name’s Bob, and I can’t tell you the state I’m from,’ ” Mr. Lee said.
Republicans who support state-run exchanges say they are embracing a fundamental conservative belief: that states should make their own decisions rather than cede control to the federal government. But groups that oppose the law have sent emissaries around the country to argue that deferring to the federal government is a shrewder move.
Michael Cannon, a health policy expert at the Cato Institute, a libertarian group, has visited more than a dozen Republican-led states, pressing them not to set up their own exchanges. Mr. Cannon, the opponent who confronted Mr. Chaney in Mississippi, said he tells states that exchanges will in fact be “an entirely federally controlled enterprise.”
Mr. Cannon says that Republican governors who are moving toward state-run exchanges are bowing to the wishes of insurance companies and health care providers. “They happen to be the interest groups that stand to get billions of dollars in federal subsidies,” he said.
Many Republicans in state legislatures, including in Arizona, do not need convincing: they are against state-run exchanges. That could make the challenge of creating them tough even if the framework is in place by November, because most states need legislative approval to establish them. Another option is a “partnership” exchange, one that is created by the federal government but that the state would have a role in operating.
Mr. Hughes said that if Ms. Brewer decided to move ahead with a state-based exchange after the election, she would ask the Legislature to sign off on creating one early next year. “Opinions can change,” he said.
But Tom Jenney, the Arizona director of the conservative organization Americans for Prosperity, said his group would pressure legislators to resist. Mr. Jenney recently challenged supporters of a state-based exchange to debate Mr. Cannon at an event his group sponsored in Phoenix. When no one accepted the invitation, Mr. Jenney played the role of a supporter himself, wearing devil horns.
“Our mission is to make it as uncomfortable as possible for anyone who has not committed to opposing the exchange,” he said.
Creating an exchange takes significant time and resources: states must build the Web sites and other technological infrastructure, a call center, outreach programs and other pieces. Mr. Hughes said Arizona had set standards for health plans that would compete on its exchange and was seeking a vendor to build some of the technological infrastructure and a call center.
But the state, he said, had “included language in all of our contracts with vendors and consultants that would allow us to cancel them.”
In the meantime, a coalition of business leaders, including many from insurance companies and health care providers, is urging Ms. Brewer to go with the state-based exchange.
Mr. Chaney said that while he faced pressure to abandon plans for a state-run exchange in Mississippi — the Tea Party there is an especially vocal opponent — he would not back down. He said that he would, however, honor a request by Gov. Phil Bryant, a Republican, to wait until after the election to submit a blueprint.
“What we’re doing here is an offensive move, and it’s a defensive move,” Mr. Chaney said. “I’m doing what I think is the best thing to give me some alternatives and what’s in the best interest of my state.”