Mitch Daniels On Health Law: ‘Start Over Not Really A Permissible Response’

Indiana Governor Mitch Daniels (R-IN) moved further away from the Republican orthodoxy this afternoon, during a lunch panel discussion at the American Enterprise Institute about the state challenges to implementing the new health care law. Just days after coming under criticism for suggesting that the next president “might have to sideline controversial social issues to broker a ‘truce’ focusing on fiscal problems,” Daniels dismissed GOP efforts to repeal the law and predicted that it “will be there for the foreseeable future.” “Start over [is] not really a permissible response,” Daniels said.

Responding to a question from Galen Institute President Grace-Marie Turner, Daniels said he didn’t necessarily believe the suits were “frivolous,” but suggested that they would not succeed:

TURNER: Do you see this becoming a real confrontation between the states and the federal government over state rights issues?

DANIELS: Maybe. Um, obviously this is being raised by some states, among other issues in a constitutional challenge. I don’t know how to rate the odds of that succeeding except to say that literally not frivolous. If I thought if I thought this really had no prospect or no merit to it, I wouldn’t have supported our joining those suits. I think you’re asking apart from that, will states at least push back hard and I would expect to see a lot of that, but I’m not certain to what avail. This law not only in being and likely to be there at least for the foreseeable future, but again, gives enormous, as I understand it, enormous authority to the Secretary of HHS and her department to color in these lines and I think you can count her on doing it in a way that’s very adverse to state prerogative. I think we’ve got a scrap coming.

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Daniels highlighted the costs of the new law to states and argued that policy makers and regulators would struggle in implementing the measure, but hinted that his state would begin complying with the law. “We have to wrestle with a question about whether to set up an exchange or not,” Daniels said. “I have to be honest, just reading all of the, watching all of this in the newspapers I thought it was something we were ordered to do by the law, required to do, it’s not so.” “It is optional. And I have to tell you we’re going to spend a lot of time before we decide to do this.”

Under the law, states that do not establish an exchange would cede that authority to the federal government, but Daniels — in a moment that underscored the flexibility of the new law — said he would consider allowing the state insurance commissioner to handle the regulatory functions of the exchange, but subcontract the management and distribution of coverage to a private entity.

Throughout the event, Daniels did his best to paint the new law as a boondoggle without noting any of the benefits in coverage expansion. According to a new Kaiser Family Foundation survey, which Daniels disputed, 215,803 previously uninsured Hoosiers would have health care coverage in the Medicaid program alone by 2019.