Red States Continue To Implement Health Reform To Avoid Federal Intervention

We’ve long known that many Republican governors are working to enact the health care exchanges in the Affordable Care Act out of a desire to keep the federal government out, but now Politico’s Sarah Kliff reports that some red states are also looking to enact rate review legislation to forestall the Department of Health and Human Services from conducting its own audit:

But in the 10 states that do not meet the federal review requirements — which include weighing a dozen factors related to rate increases, posting insurance filings and allowing for public comment — HHS must now prepare to handle the process.

Pennsylvania and Alabama, two states that do not have “sufficient” review authorities under the federal regulation, are both looking at enacting legislation to address the issue and keep the federal government out, POLITICO has learned. Both states are helmed by Republican governors.

The move to comply with an Affordable Care Act requirement to head off federal intrusion could be a harbinger of things to come. Particularly in states that oppose the law, it could signal a begrudging willingness to set up a health exchange as a means of retaining more state control over the marketplace.


So for the Obama administration, it’s certainly an encouraging sign: Officials have repeatedly emphasized their desire that states handle as much of the implementation process as possible — as well as their interest in bringing increasing scrutiny to insurance rate increases.

I’ve long been of two minds on this — on one hand, it certainly makes sense for states to be writing rules that govern their unique marketplaces. But forcing reticent governors or legislators to write rate review or even exchange regulations just to get the federal government off their backs probably won’t make for very consumer-friendly reforms (see South Carolina), and in those cases, it may make for better policy if the federal government stepped in and ran things.