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Posted at 12:07 PM ET, 02/ 8/2011

What happens if governors ignore health-care reform?

By Ezra Klein

It's worth noting that the threat in Indiana Gov. Mitch Daniels's op-ed is that governors such as he won't lift a finger to implement the health-insurance exchanges. But it's important to note, as Sam Stein does, that if governors walk away from implementation, the bill empowers the feds to simply implement the law themselves:

"For a lot of things there is a federal backstop," explained one administration official. "States have the first crack at it, for the lack of a better phrase, and states are empowered to take the lead on things, that's what we wanted. . . . But at the same time we aren't going to allow someone not to get important consumer protections just because he has the misfortune of living in a state that doesn't like the law."

The threat of federal intervention is more motivating than any other card the administration has or can play, and it is felt most acutely with respect to the state-based exchanges, which are required to be operational by 2014.

Len Nichols, a health care policy expert with George Mason University, has consulted a number of state governments on implementing reform. And when he looks at how governors are handling the federal grants coming their way, he offers a simple set of questions:

"Are you confident you can beat Barack Obama in 2012? If the answer is no, and you say, 'I don't want to do reform and bet I can beat him,' if you lose, then Kathleen Sebelius will set up your exchange. Who wants that? No one. Not even Massachusetts."

By Ezra Klein  | February 8, 2011; 12:07 PM ET
Categories:  Health Reform  
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Is there anything that would prevent a state from enacting a massive state tax on policies issued through the exchanges?

Posted by: ath17 | February 8, 2011 1:35 PM | Report abuse

Yes, federal bureaucrats can devote their labor towards implementation of the PPACA; however, Congress must authorize the expenditures.

The current fiscal analysis of the PPACA relies on funds drawn from Sovereign State fiscs: the money to implement the PPACA doesn't exist at the federal level. So, in the absence of Gubernatorial assistance, Congress will have to approve additional funding AND will have to approve such funding without the ability to write 50% of the cost as a "state match".

In short, the Governors are in a very, very powerful position. In addition, some state legislatures (like Florida) are prohibited (by state Constitution provisions) from simply raising state taxes to meet the burdens of the PPACA. The President and the Senate have painted themselves into a corner: PPACA groupies must either capitulate or become wholly irrelevant.

Posted by: rmgregory | February 8, 2011 6:49 PM | Report abuse

If you take Mr. Klein's comments seriously, you should consider reading this:

Posted by: vonmiseswasright | February 8, 2011 9:51 PM | Report abuse

I would like to tell the Obama Administration, Why don't they tell the American People the truth about health care reform. I pay over 500.00 per month for insurance and the company I work for pays 800.00 per month for myself & family, and with the Obama Health Care that 1300.00+ per month for insurance is going to be considered Earned Income. If you sell your house, you will pay the U.S. Government 3% of the selling price. Our insurance premiums have almost doubled since the passing of The Obama Health Care Reform. Instead, I believe they can raise money for those Americans who are not covered by STOPPING HEALTH CARE FOR ILLEGAL ALIENS. Ask yourself this question, If I were in another country, will their government cover my visit to the emergency room? Also, STOP EDUCATING ILLEGAL ALIENS, we are in an education budget crisis and we need a law to only educate people from this country legally.

Posted by: salomonr8 | February 10, 2011 11:58 AM | Report abuse

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