Politics & Policy

Health-Care Chaos

States air frustrations over Obamacare’s confusing rules.

Officials from states both red and blue are frustrated and confused about Obamacare, and even those who want to implement the law are privately expressing anger at the Obama administration for providing them so little information on how to proceed.

The National Governors Association recently called a meeting of state officials to discuss implementation of the massive health-care law. On Friday, the NGA circulated a summary of the two-day meeting, “Timelines, State Options, and Federal Regulations,” which was attended by 120 officials from 40 states and territories.

#ad#The three major components of the law — insurance reform, Medicaid expansion, and health-insurance exchanges — are primarily the states’ responsibilities, but the states must work within the federal government’s rules, and the administration has been very slow to explain what those rules are. “Federal guidance has yet to be released or finalized on many issues,” the NGA report said, “confronting states with a lack of clarity.”

Insurance exchanges, for example, must be “wholly created in a very short time period,” and yet they present “major challenges,” because the states must establish interconnected, automated systems to determine whether any particular citizen is eligible for subsidies and, if so, through which program.

Besides the lack of direction, the states are also concerned about the costs and resources needed to implement the law. “Tight deadlines, severely strained budgets, and human-resources shortages further complicate implementation in nearly every state,” the report said.

Officials who participated in the NGA meeting represented a continuum of states, from ones that are resisting the law, to ones that are still trying to figure out what to do, to ones that are completely on board. “Despite these differences, many of the challenges that state officials described were echoed throughout the meeting by the entire range [of] states participating . . . All of the states have concerns.”

Some states plan to rely on the federal exchange, but for those that are planning to implement a state-run exchange, they fear that if they do not start now, it will be impossible to meet the deadlines in the law, and that would put them at risk of having a federally operated exchange imposed upon them. Yet all are “unsure of the implications on state operations, regulation, and finances, and are somewhat daunted by the challenge of extremely complex implementation.”

The report gives some indication of the magnitude of the task facing the states:

Alongside the considerable challenge of greatly expanding their Medicaid programs, states are also charged by the ACA with creating a single, seamless point of entry for all of the insurance affordability programs affected by the Act — Medicaid, the Children’s Health Insurance Program (CHIP), the Basic Health Plan (where offered), and advanceable tax credits for individual and Small Business Health Options Program (SHOP) exchange enrollees.

Because income changes will create constant movement in and out of those programs, it is necessary to have well-developed systems with tight integration between them. As previously discussed, systems challenges for creating integrated enrollment platforms could tax vendor capabilities in some areas and test the agility of the states that are already in the midst of Medicaid systems redesign.

The report also said that “states worry that if a federal exchange were the single point of entry to all the state’s insurance affordability programs, they may lose control of their Medicaid program” — and therefore lose control of spending in what for many is the single largest item in the state budget.


The NGA report was circulated around the same time that one of the administration officials charged with providing guidance to the states indicated to an audience in Washington, D.C., that the strategy is basically to ignore their pleas. States are anxious to know, for example, what will happen if they decide not to set up their own exchange and let the federal government do it instead. At a conference on exchanges sponsored by an industry group called America’s Health Insurance Plans, Tim Hill, deputy director of the new Center for Consumer Information and Insurance Oversight, acknowledged that concern. The states, he said, have “clearly” voiced interest in learning more about the federal fallback exchange during three listening sessions the administration has conducted around the country. Unfortunately, he gave no indication that the government was close to providing them any clear answers.

#ad#Obama administration officials have scheduled a meeting with representatives from 46 states in Washington, D.C., this week to discuss exchanges. Federal officials charged with implementing the law are trying to persuade more states to do the work to get exchanges set up, but without more guidance and clarity on key questions, the effort is unlikely to be persuasive. Federal officials say they are trying to be “flexible,” but, according to the NGA report, “states indicated that this flexibility without clear transfer of authority from the outside translates into uncertainty, resulting in implementation difficulties, delays, and increased costs.”

“To make informed decisions, states need as much clarity as possible,” the report concluded. Among other things, they need details about what benefits must be covered and what a federal exchange would look like. “Moreover, there is deep concern that if deadlines for federal guidance issuance move further back, states will be unable to make further progress.”

This report shines one more spotlight on the massive and near-impossible task of implementing a law that attempts to overhaul one-sixth of our economy through a top-down, bureaucratic structure. The administration may genuinely want to provide flexibility to the states, but the more likely explanation for the lack of hard information is that the administration is using the guise of flexibility to cover its own inability to provide the incredibly detailed, complex, and consequential guidance the states need.

On top of the massive unpopularity of Obamacare, the NGA report provides further evidence that the law simply cannot work.

— Grace-Marie Turner is president of the Galen Institute and co-author of Why ObamaCare is Wrong for America: How the New Health Care Law Drives Up Costs, Puts Government in Charge of Your Decisions, and Threatens Your Constitutional Rights.

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