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Healthcare Reform: Obama Offers the States Flexibility, and the GOP Says No

It seems unlikely that Republicans will back President Obama's proposal to give the states more flexibility on healthcare reform. But even if they did, it would be a trick, since GOP officeholders have no intention of trying to achieve universal coverage. Nevertheless, Obama's surprise declaration of support for a bill that would speed the pace of state innovation could shake up the healthcare debate.

The Affordable Care Act allows the states to devise their own reform plan if they can convince the feds that their plan would cover as many people as the ACA without increasing the federal deficit. Right now, states can't do that until 2017, even though the key provisions of the ACA -- including state insurance exchanges -- go into effect in 2014. The legislators mandated this delay so that the government would have three years of experience with the cost of expanding coverage before it had to provide block grants to states choosing different paths.

From the start, liberals have been more enthusiastic about speeding up this process by allowing states to start experimenting in 2014. That's exactly what the bill cosponsored by Sen. Ron Wyden (D-Ore.) and Sen. Scott Brown (R.-Mass.) does. In fact, Sen. Bernie Sanders, the left-wing independent from Vermont, helped Wyden write the original provision of the ACA, because he wanted to give his state the option of creating a single payer system. Some liberals see Obama's new move as an opening for other states to move in that direction as well.

Red states could also do their own thing, such as persuading rather than requiring residents to buy insurance. But most Republicans aren't inclined to support the bill because, as NYT columnist Ross Douthat put it, requiring states to subsidize comprehensive insurance with federal funds is the opposite of the "market friendly approach" that the GOP favors.

Initial reaction from Republican governors to Obama's proposal ranged from guarded to negative. Gov. Sam Brownback of Kansas rejected it because it doesn't eliminate what he and other Republicans see as a fatally flawed law. "This [proposal] offers a little bit of flexibility, which I think is a positive thing, but it doesn't change the overall objection to the bill," he said.

A spokesman for House Speaker John Boehner (R.-Ohio) was equally dismissive:

Mandating many of the same requirements [as the ACA], this plan would treat states as agents of the very law these governors are running away from. A better approach would be working with reform-minded governors to give states more flexibility to lower health care costs immediately by, for example, fixing costly federal regulations on Medicaid. Now that the administration has conceded that Obamacare is unworkable, we hope they will work with us to repeal the law and replace it with common-sense reforms that actually lower cost.


In other words, good try, but no cigar. The Republicans are not about to be forced to come up with a workable alternative to Obamacare. But by giving them the opportunity to do so, Obama has improved his political position: his opponents can no longer say that the Democrats are forcing them to do exactly what's in the Affordable Care Act.

What Obama did on Monday was a continuation of what he did in the State of the Union address: challenge Republicans to propose an alternative to the ACA or drop it as a campaign issue. But they're not going to, and the fight will go on as long as it serves a political purpose.

Image supplied courtesy of Wikimedia Commons.

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