State of Contention as Officials Wrestle Over Reform Law

State of Contention as Officials Wrestle Over Reform Law

The health reform law has presented a significant challenge for many of the nation's governors, who are struggling with scarce funding, election-year politics and new federal policies. In some states, officials are moving forward to comply with certain portions of the law as they also fight the overhaul in court.

Many of the nation’s governors continue to clash with the White House over implementing the health reform law, forcing some state health officials to straddle election-year politics and new federal policies.

The law gives states discretion over key provisions, such as the design and implementation of the insurance exchanges, through which as many as 30 million U.S. residents may buy health coverage. HHS Secretary Kathleen Sebelius has repeatedly referred to the overhaul as the “most state-friendly Washington-designed bill” that she’s seen in years.

However, one GOP governor says, “The bill raises almost 1,000 questions [about implementation] and so far they have zero answers,” and even Democratic leaders have expressed concerns about the law’s funding and timing. Some state budgets are so strapped that agencies lack staffers who can “handle basics such as writing grants to apply for implementation funding,” the Wall Street Journal reported.

State-Level Resistance Grows

As some states take on the challenge of health reform implementation, other states are actively fighting specific provisions.

A Virginia lawsuit challenging the individual mandate’s constitutionality continues to move forward, and Missouri voters on Tuesday passed a ballot measure intended to ban any government from mandating that residents have health insurance or penalizing residents for personally paying their medical bills. Although Missouri’s measure likely will not have any legal effect — federal law typically trumps state law — its symbolic passage could spur similar efforts in other states.

Colorado is the latest state to consider an amendment that would prohibit the new reform law’s individual mandate and allow medical personnel to accept cash for their services.

Exchange Design a Key Point To Watch

The Obama administration says it expected challenges over the bill’s mandate, which could reach the Supreme Court in coming years. In the interim, the design of and control over new insurance exchanges will likely become “one of the federal-state battlegrounds that will play out over the next months and years,” according to Stuart Butler of the Heritage Foundation.

The exchanges require governors to make many “technical and ideological” decisions, says Joanne Kenen of the New America Foundation. Will states create their own exchanges or partner with others to manage regional exchanges? Which health plans will be allowed to participate and how will they be regulated?

Some help could come in the form of new grants HHS announced last week that would allow states receive up to $1 million toward their exchange planning efforts. According to Rick Curtis, president of the Institute for Health Policy Solutions, these added funds are essential because most states currently lack “resources to take these critical initial steps.”

However, some governors say they need more time and information from the government in order to properly construct their exchanges.

Some Officials in Awkward Position

The situation in Texas mirrors what many officials in other states are experiencing. Roughly one in four Texas residents is uninsured, and the new reform law promises to provide the state with billions of dollars in federal aid to help its uninsured residents obtain adequate coverage and care.

However, some of Texas’ most-prominent lawmakers — including Gov. Rick Perry (R) and the state’s attorney general — have shown “open hostility” toward the overhaul and have joined or launched broad efforts in opposition to it, citing the potential “fiscal threat” to the state. 

Despite the rhetoric, Texas health agency officials have said that local lawmakers and elected officials have not interfered with their efforts to prepare for the law’s requirements to establish a new health insurance exchange or implement strict rules on health insurance companies. According to Texas Health and Human Services Commissioner Thomas Suehs, Perry “expects me to implement the federal law in the most cost-effective, efficient manner.”

California: ‘Willing but Broke’

California officials might have a more positive outlook on reform, but the state still faces bumps in the road to reform implementation. While it ultimately failed, Gov. Arnold Schwarzenegger’s (R) own health reform plan campaign left California well-positioned to implement the national overhaul, notes the New America Foundation’s Kenen. Further, Schwarzenegger has emerged as the most prominent Republican to champion the overhaul, and state lawmakers have moved forward with a slew of bills intended to assist with the rollout.

The Golden State also has experience with insurance exchanges, through its PacAdvantage system. Without a large pool of purchasers, small businesses were unable to muster the collective bargaining power to negotiate lower insurance rates, and the exchange dissolved in 2006. Experts suggest that California’s exchange failed because it did not require all stakeholders to participate, unlike the current overhaul.

However, California’s ability to be a leader on reform implementation could be hindered, as the state continues to grapple with severe budget concerns that may force cutbacks to safety-net programs like Medi-Cal, the state’s Medicaid program. California’s unemployment rate more than doubled between 2007 and 2009, boosting the number of state residents without health coverage and setting up additional fiscal challenges.

Essential Decisions May Wait Until After Fall Elections

Sebelius is ramping up her efforts to address governors’ concerns and has begun meeting with state leaders in both individual and group settings. Sebelius’ office in early August also plans to host governors’ staff from several states to discuss the exchanges.

However, many key decisions might need to wait until after this fall’s elections. Some GOP governors currently up for re-election could dial back their resistance to the overhaul, particularly if they determine the law will bring their states needed funds. Meanwhile, national efforts that shape implementation, such as making available more federal funding or changing deadlines, could hinge on whether Republicans make significant gains in Congress.

Here’s a look at what else is happening in health reform.

In the States

On the Hill

Administration Actions

In Public Opinion

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