Last week's split decisions by federal appeals courts on the Obamacare subsidies are rippling down through the states. A three-judge panel on the D.C. Circuit ruled that the law says that subsidies should only be available to customers in states that created their own exchanges under the law, while in a second case the Fourth District Court ruled that the law intended for everyone in all the states to be eligible. Not knowing which way the case will wind up, governors in states that base their exchanges on the federal system are
working to protect the insurance subsidies that have provided millions with affordable health insurance.
Among the 36 states, the level of federal involvement varies. That means states see gray areas to work with, if they want to, though the ultimate decision about their status would likely hinge on additional court decisions and determinations by the Obama administration.
For example, two states, Idaho and New Mexico, had intended to set up their own exchanges but turned to the federal government to handle their technology in May 2013. The Obama administration has described them as "federally supported state-based" exchanges and often issues data on their behalf, in which it groups them with the other 34 states with "federally facilitated" exchanges.
Two other states, Nevada and Oregon, are currently considered to be among the 14 "state-based" exchanges, but have had technological problems and are now looking to the U.S. to operate their technology for the coming year.
Idaho, Oregon, and Nevada have all issued statements saying that they run state-based exchanges, that the technology might be borrowed from the federal government, but the actual administration of the exchanges is what matters, and that it is done by the states. That's the argument also made by Delaware and to varying degrees as well by Arkansas and Illinois, where there are strong pushes from the legislatures to move ahead on establishing fully state-run exchanges. That's because the
political ramifications are potentially very big.
“It becomes health reform for blue states,” said John Holahan, an author of the Urban Institute report. “In the rest of the country you don't have health reform.” […]
“If the end result is if you live in New York you get (subsidies) and if you live in Georgia you don't, I don't think that's politically palatable,” said Kevin Wagner, a political science associate professor at Florida Atlantic University. “You start hitting middle-class people, and they vote.”
Republican governors in Florida, Georgia, Maine, Pennsylvania and Wisconsin are all up for re-election this November and all to varying degrees foes of Obamacare. For a few of them who have refused Medicaid expansion, their opposition to the law has already proven to be a campaign issue. Add in the loss of insurance to a huge chunk of people who have had it for this year—and many more people being deliberately hurt for political purposes—and you've got some serious election-year fallout.