Yesterday, responding to Rep.-elect Andy Harris’ (R-MD) hypocritical demand for government-sponsored benefits, Rep. Joe Crowley (D-NY) began circulating a letter among his Democratic colleagues calling on Harris and other members of Congress who want to repeal the new health care law to forego their own government health care plans. In a letter to House Minority Leader John Boehner (R-OH) and Senate Minority Leader Mitch McConnell (R-KY), Crowley writes, “If your conference wants to deny millions of Americans affordable health care, your members should should walk that walk.”

This morning, a caller to C-SPAN’s Washington Journal asked Rep.-elect Mike Kelly (R-PA) — who also opposes the health care law — if he would be willing to give up his government-sponsored health insurance. Kelly said that he would:

KELLY: There is no reason for anybody to get anything different than anybody else. I personally have always paid for my own health care… why should my pension as a public official be any different from anyone else’s pension? Why should my health care, as a public official, be any different than anybody else’s? No, level across the board. [...]

Q: So will you have a Congressional plan?

KELLY: No, I do not need. I got my own plan, I don’t need a congressional plan. I’ve taken care of myself for a long time.

Watch it:

The Congressional health care system — the Federal Employees’ Health Plan (FEHBP) — is very similar to the Exchanges established in the Affordable Care Act. Like federal employees, beginning in 2014, many Americans will be able to choose coverage from a series of private options competing for their business within a new health care market place — the state-based exchange.

Kelly, however, will not have that choice of enrolling in an FEHBP plan by 2014 and could have coverage that is “the same as everyone else’s.” Under a Republican amendment to the Affordable Care Act, “the only health plans that the Federal Government may make available” to Members of Congress and congressional staff” are “health plans that are I) created under this Act (or an amendment made by this Act); or (II) offered through an Exchange established under this Act.”

Today, Sen. Ron Wyden (D-OR), along with Scott Brown (R-MA) introduced the “Empowering States to Innovate Act,” moving up the date for when states can opt out of certain requirements under the Affordable Care Act and pursue more innovative ways of expanding access and reducing costs. If adopted, states that demonstrate that they can cover “at least as many citizens with coverage that is at least as comprehensive and affordable as prescribed under federal law,” will be able to exempt themselves from “the individual mandate, the employer penalty for not providing coverage, the exact standards for a basic health insurance policy and the structure of the health insurance exchange” beginning in 2014, rather than the current 2017 requirement.

“I fought to include state waivers in the new health reform law because I have always believed that federal reform shouldn’t constrain a state’s ability to do better,” Wyden explained in a statement released this morning. “Some of the most innovative approaches to health policy have originated at the local level, where lawmakers have a unique insight into their constituents’ lives and the state waiver simply gives states the bandwidth to pursue those kinds of approaches,” Wyden said.

Wyden, Brown and Sen. Bernie Sanders (I-VT), who co-sponsored the original innovative waivers amendment, believe that their home states of Oregon, Massachusetts, and Vermont are leading the pack in adopting innovative approaches — single-payer Vermont or a single-payer proposal recent introduced in Oregon– but it remains unclear how many other states would be able to meet the requirements of the waiver.

Some health policy wonks don’t think it can be done without a mandate. January Angeles, a health policy analyst at the Center on Policy and Budget Priorities, says that Wyden’s waiver does not exempt states from reforming their health insurance markets — extending guaranteed issue and community rating — and claims that “whether or not he gets this waiver, Oregon still has to implement those market reforms.” “There is no way to implement those market reforms” without a mandate, she insists. “There is just no way to make it work and have the popular elements of reform and make it work.”

States would still have to abide by the insurance market reforms in subtitles A, B, and C of the Affordable Care Act and Wyden’s office responded to the criticism this way: “if a state can’t come up with a solution that meets those reforms and all of the other cost and coverage requirements then it won’t qualify for a waiver.” “Senator Wyden wrote the state waiver provision to be purposefully unspecific so that states would be free to innovate new ideas that none of us may have thought of yet,” Wyden’s communications director Jennifer Hoelzer wrote me in email. “And if they can’t make it work as some are suggesting, then they won’t qualify for the waiver.”

Interestingly, Kaiser Health News reported yesterday that Sen. Ben Nelson (D-NE) “has asked the Government Accountability Office to study alternatives to the controversial mandate requiring most Americans to obtain coverage” and may be looking to come out against the mandate ahead of his re-election bid in 2012. Since Wyden has touted his waiver as an alternative to repeal, I asked Nelson’s office why the Senator had not signed on to the amendment. “He’s not at this time,” was all Jake Thompson — Nelson’s Communications Director — told me.

This morning, HHS released its “Initial Guidance to States on Exchanges,” in which it defines and summarizes the statutory requirements for establishing the new health insurance market places in 2014:

Beginning with an open enrollment period in 2013, Exchanges will help individuals and small employers shop for, select, and enroll in high-quality, affordable private health plans that fit their needs at competitive prices. Exchanges will assist eligible individuals to receive premium tax credits or coverage through other Federal or State health care programs. By providing one-stop shopping, Exchanges will make purchasing health insurance easier and more understandable.

States have a lot of discretion in how the construct their exchanges and the federal government has already issued its first batch of planning grants to help states build their unique market places. More funds will be available next year, once state legislatures across the country pass legislation establishing the exchanges. But the two states that did not apply for the funds in protest of health reform — Minnesota and Alaska — may have a hard time receiving new dollars, the guidance suggests:

Forty-eight States and the District of Columbia were awarded their first Exchange grants under Section 1311 in September 2010. Those grants were for planning purposes and the next round of grants will be for the purpose of establishing an Exchange. The opportunity to apply for grants will be announced in February 2011 and will become available on a rolling basis throughout the next three years. States will have to meet certain milestones in order to be awarded grants in 2011, and the size of State awards may be related to the number of milestones met. States that are not able to meet required milestones by spring 2011 may apply for grants later in the year. Necessary Exchange costs will be fully funded by HHS until 2015. After January 1, 2015, Exchanges must be self funded.

The problem is, Minnesota and Alaska would have to meet certain benchmarks without federal assistance in order to receive new funding. Should they fail to do this and find themselves unable to construct their own exchanges, “now or at a later point in the process,” “HHS will work with the State to establish an Exchange,” the guidance reads.

The federal government may not be exactly taking over, but ironically by resisting planning grants these Govs. Tim Pawlenty (R-MN) and Sean Parnell (R-AK) may be ceding at least some control to the federal government, bringing about the very kind of “government takeover” that they have been protesting by resisting these funds in the first place.