Republican Governors Debate Health Exchanges

States are moving to set up health insurance exchanges — a pillar of Obama's health care law. But many GOP governors find themselves in an awkward position. David Wessel, economics editor of The Wall Street Journal, talks to Steve Inskeep about why the governors' positions on exchanges are complicated.

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STEVE INSKEEP, HOST:

Some provisions of the new health insurance law have already taken effect. For example, young adults can stay on their parent's insurance until age 26. Other provisions do not take affect until the year 2014, including a provision that is complicating the lives of 29 Republican governors. It's the requirement that every state set up a health insurance marketplace, known as an exchange.

David Wessel, economics editor of the Wall Street Journal, is tracking the story. He is a frequent guest of this program.

David, welcome back.

DAVID WESSEL: Good morning, Steve.

INSKEEP: I'm not sure that everybody has clearly, in their head, what this exchange is supposed to be. Is it a building? Is it a website? What is it and what does it do?

WESSEL: Well, it could be a building. It could be a website. It'll probably be both. But think of it as an Amazon.com, where an individual or a small business can go and buy health insurance, where you'd be able to do you see that competing plans from private insurers. It would all be done in a way so you could compare them, and it would be one-stop shopping. So if a person were eligible for Medicaid, the state federal program for the poor, you could get it there. If you are eligible for new subsidies to buy insurance which are provided for by the new law, you can get them there. So it would be a marketplace and a one-stop shop for health insurance for people who don't get it on the job.

INSKEEP: OK. Now it's a given here that Republicans are very strongly opposed to the president's health care law. But what you're describing sounds like a marketplace. It sounds like competition. It sounds like shopping for the lowest price. Are Republicans opposed to that part of it?

WESSEL: Well, that's exactly the problem. In general, Republicans have liked this idea. In fact, the two states that set these things up initially, before the president was even elected are Utah, which had a Republican governor, and Massachusetts which, of course, had Republican governor Mitt Romney at the time. Mike Leavitt, who is the former governor of Utah, is a big advocate of exchanges. He calls them a very practical solution to a problem that needs to be solved, and he actually has a consulting company that's going around the country helping states set them up at the same time that he advises Mitt Romney.

INSKEEP: That's interesting. So are Republican governors then embracing this idea?

WESSEL: No. They're split. Some of the most nationally prominent - Walker of Wisconsin, Kasich of Ohio, Perry of Texas - aren't building exchanges. Chris Christie, the Republican governor of New Jersey, has to decide today whether to veto a bill that the Democratic legislature sent him that would create one. But what I find interesting, is a number of governors - whether they are for or against the president's health care plan, whether they are suing him in the Supreme Court are not about whether it's constitutional - are going ahead and building them. Jan Brewer of Arizona, Phil Bryant of Mississippi. The Republican governors in Michigan and Pennsylvania want to set up exchanges, but they're running into trouble from their Republican legislatures.

And in Kansas, the governor, Sam Brownback, is against setting up an exchange, but the elected Republican insurance commissioner, Karen Prager is trying to lay the groundwork and so they'll be ready in case the law is upheld and they'll have one of their own design.

INSKEEP: And just so that I understand this, if the law is upheld the states are required to set up an exchange? It's not an option, it's a requirement? Is that right?

WESSEL: If the law is upheld every state has to have an exchange by January 2014. If the states don't do it, then they'll be stuck with one that's designed by the federal government.

INSKEEP: OK. So does this all then turn on the Supreme Court ruling that we're expecting some time soon on the health care law?

WESSEL: Yes. And some governors say they don't want to waste time building an exchange until they know what the court does. In Alabama, for instance, the Republican House passed a bill creating an exchange but has a provision that the law dies if the Supreme Court rules against the law. And the governor there, Robert Bentley, also a Republican, who was originally interested in setting up an exchange, now says it would be premature and he wants to wait for the court to act. The problem is if the states wait for the court to act they may not have enough time to get one set up by January 2014.

INSKEEP: David, thanks as always.

WESSEL: You're welcome.

INSKEEP: David Wessel is economics editor of The Wall Street Journal.

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