GOP Governors Won't Block Health Law

There are too many federal dollars at stake -- and too many wheels already in motion -- to reverse course completely.

GOP control in more states will definitely slow implementation (opens in new tab) of the health law, but don’t expect the newly elected governors and legislators to go too far in saying no. While many successful Republican candidates made repealing or blocking the law a central part of their campaigns, once they are in office they will find it hard to make good on those promises.

And because there is little prospect that Congress will repeal the law, the best that GOP opponents in the states (opens in new tab) can do is slow down implementation of some provisions.

One key reason: Cash-strapped states are not likely to reject federal dollars. Only Alaska and Minnesota have said no to initial $1 million grants to start work on health insurance exchanges, the markets that will allow consumers and businesses to shop for health plans. Soon, millions more from Uncle Sam will be available to help states build the exchanges.

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Most states will find it similarly difficult to turn away millions of dollars designed to help offset the cost of the law's broad expansion of Medicaid services. "It's the deal of the century" because the federal government is picking up 100% of the tab for Medicaid expansion for the first few years, says Enrique Martinez-Vidal of AcademyHealth, a nonprofit health research firm. And if that isn't enough to turn the tide, hospitals, physicians and other health care providers in the states will lean on their elected officials to embrace the Medicaid expansion.

Another reason: States want to have a say in designing their health exchanges. The health law gives states a lot of leeway in designing the exchanges. But if states fail to take action by 2013, the federal government will come in and set up the exchange for them. "No governor wants to cede control to the bureaucrats in Washington," says one health reform advocate.

Even in states that are joining in the court battle to declare the health law unconstitutional, such as Virginia, work is under way on health insurance exchanges.

Look for states controlled by Republicans to push less-regulated exchanges. They can use Utah as a model. There, any insurer meeting the state criteria can play, and premiums are set by the market. The GOP likes that better than the situation in Massachusetts, where a state panel known as the Connector chooses participating plans and negotiates prices and benefits.

Martha Lynn Craver
Associate Editor, The Kiplinger Letter