The argument for the national government administering things over the states has always been summed up, I thought, by an old James Carville joke: I’ll race you from Disneyland to DisneyWorld. I get to take the federal roads.
That joke, however, has been turned upside down by implementation of the Affordable Care Act (ACA). The whole sequence has been weird. After all, the law—as a concession to moderate Democrats who feared Republican attacks about a federal-government takeover—wound up asking the states, and not the federal government, to run the exchanges. But Republican-led states refused to do so. When the federal-run Healthcare.gov crashed, the odd result is that the current winners of the federalism battle—which is often waged, at least rhetorically, by Republicans dead set on keeping the feds out of their local government—are Democratic states such as California and New York where things are running reasonably smoothly. Or at least far better than the federally-run exchanges.
One possible result of all this? A revival of the reputation of the state governments, which are (as the Carville joke suggests) not always thought of as synonymous with efficiency and effectiveness. Now we have Tennessee’s state-run exchange running rings around Healthcare.gov.
A larger question, however, is exactly what might have happened had Republicans attempted to achieve their own policy goals, rather than just automatically opposing and resisting every bit of Obamacare (in part, as part of an extreme longshot opportunity to upend the ACA in the courts; in part as just a strategy of being fully against whatever the Kenyan socialist in the White House was for).
In particular, the state-run exchanges seem like a real lost opportunity.
Imagine if, right now, there were only a handful of states in the federal exchange, and some of the more aggressive and innovative conservative governors were running their own exchanges.
There’s a good chance that they would have been very different from Kentucky or California or New York’s exchanges. While you wouldn’t know it from listening to post-policy Republican politicians, conservative health care wonks really do have some ideas on how to do health care that could be tested outside the punditsphere. For example, Ross Douthat uses every excuse—including the current media frenzy—to trot out his case that the ACA’s big mistake is going for comprehensive insurance. Douthat argues that health insurance shouldn’t attempt to cover relatively small, relatively predictable expenses, just as car insurance doesn’t attempt to cover oil changes and trips to the car wash.
Whether or not that’s something that most people want, it does make sense from a conservative perspective. Insurance generally is about sharing risks. The more comprehensive coverage is, the more risks—the most health-care costs—are shared. Liberals who take seriously the idea of health care “as a right, not a privilege” support that idea, but it’s certainly understandable that conservatives see things differently.
Under the current ACA, states are allowed waivers for policy experimentation—but generally only in a liberal direction. In particular, plans still must have at least the same comprehensive benefits, if not more.
However, suppose that several Republican governors had pushed for a deal in which they would implement Obamacare, including setting up exchanges in their states, if and only if they were given waivers and allowed to try some conservative policy ideas. The pressure would have been intense on the administration to allow at least some of them. After all, the administration never wanted to build all those different state exchanges in the first place. And certainly the president didn’t want obstruction verging on sabotage from Republicans across the board, as is de rigueur now. In order to get some Republican buy-in, there’s a very good chance Obama would have been extremely willing to cut deals, even if liberals would have been appalled at the results for the affected states.
As for Republicans, there remains no real conservative principle violated by government-supported private insurance markets. Government intervention remains necessary because of the particular nature of the insurance market. That’s true whatever the eventual market looks like; it’s true of the pre-reform insurance market just as much as it’s true of insurance under ACA.
Of course, principles like that rarely govern what politicians and political parties do. Republicans have pursued a complete rejectionist strategy when it comes to health-care reform from day one through today. Whatever the electoral effects of that choice, the policy costs to conservatives are clear: they had little or no say in how reform played out, and they squandered an opportunity for a true “laboratories of democracy” test for their own health-insurance ideas.
Republican governors who attempted such policies would have been taking on some real risk—not all of the states that did decide to take on the exchanges have seen success, and experimentation would have upped the chances of snafus and slow starts. Not only might their experiments turn out badly, but they would have taken on the responsibility of building the exchanges in the first place—responsibility-taking has not been the favored political position of the right wing as of late. The payoffs would have been very nice, too; imagine if right now a dozen or more Republican states had smoothly functioning marketplaces. It certainly might have been a far better bargaining position than they have now, given that they still have no alternative to propose to the Democrats’ version of reform.
It’s one of the more interesting might-have-beens of the health-care reform story.