When the Patient Protection and Affordable Care Act (PPACA) bills were signed by President Obama in March 2010, states already were moving to protect themselves from this overtly partisan major legislation, which affects every state, person and company in the United States.  Arizona and Oklahoma overwhelmingly passed the Health Care Freedom Act constitutional amendment in 2010, and Florida, Alabama, Montana and Wyoming will go to the ballot next year.

This week, Ohio voters will decide whether to amend the state constitution to say that the government cannot: (a) force you to participate in a healthcare system, (b) prohibit the purchase or sale of health care or health insurance or (c) impose a fine or penalty for that purchase or sale.

The controversial and mostly unpopular PPACA law has produced a lawsuit to declare it unconstitutional, filed on behalf of 26 states and the National Federation of Independent Business (NFIB); a blueprint with at least 159 new federal agencies, boards and commissions; and a “wave” election in 2010.  It also has spawned an interesting debate among and between those states represented by leaders which have moved to facilitate the federal scheme, those who are conflicted about the best approach and those who are in active opposition and have even refused federal money for development of the state insurance exchanges required to manage subsidized health care.

Earlier this week, Lt. Gov., Mary Taylor sent a letter to the lady who now runs the most expensive and expansive government organization in America. Taylor, who doubles as the state’s insurance regulator, let HHS Secretary Sebelius know that Ohio “has not committed to a state-based exchange” yet, and is concerned about “the increased costs associated with a one size fits all approach that is bad for Ohio.”

Sentiment and policy reaches even deeper than the exchanges, which must be operating by January 2013 under PPACA.  In Wisconsin this week, the chair of the Senate committee considering a bill to harmonize existing state law with the federal reforms chose to let it die in his committee. (“Children” are covered under a parent’s policies until age 27 in Wisconsin, so the changes are not a complete liberalization.)  “If Wisconsin opens the door to ObamaCare, there will be no closing it,” Sen. Frank Lasee said in a statement. “A line must be drawn in order to protect Wisconsin’s residents and industry against federal intrusion. I am drawing it.”

In Ohio, Lt. Gov. Taylor’s letter notes there is no federal funding beyond 2015, and wonders why HHS would still require six months to approve any changes.  The Ohio regulator also pleads for more flexibility, as the plain language of the federal statute requires HHS approval on everything.  Ohio also wants to know if it can choose between an exchange that is “a pure marketplace for competition” in comparison to the model extending “the state’s regulatory arm.”

Are these exchanges important?  Well, families with up to $88,200 (in 2010 dollars) of household income can receive subsidized insurance premiums at the exchanges if their employers don’t offer plans approved both for coverage and “affordability.” Management consultant firm McKinsey & Co. has predicted that 80 to 100 million individuals are going to change coverage categories in the two years following 2014. Hewitt Resources, a health care consulting firm, recently advised Verizon “to avoid additional costs and regulations, employers may consider exiting the employer health market and send employees to the exchanges.”

Some states are arguing that setting up the exchanges themselves will allow the states to be in control of them.  Some states appear to be weighing the combination of lack of control and possible negative outcomes and deciding to let the federal government take full responsibility for implementing these facilities.

It is proving to be a strenuous and critical exercise in federal-state relations. With constitutionality cases headed to the U.S. Supreme Court and the precedent of 132,000 pages of government regulations generated by the Medicare and Medicaid laws (according to a 1998 study by the Mayo Clinic,) we have virtually no idea yet which way the nation is actually headed on health care reform.

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