James Capretta and Yuval Levin explain how state governors that refuse to set up insurance exchanges could thwart implementation of Obamacare:
By declining to build exchanges, the states would pass the burden and costs of the exchanges to the administration that sought this law. And it is far from clear that the administration could operate the exchanges on its own. Congress didn't allocate money for administering federal exchanges, and the law as written seems to prohibit federally run exchanges from providing subsidies to individuals.
The administration insists that it can provide those subsidies anyway. But if the courts read the plain words of the statute, then federal exchanges couldn't really function. Thus states that refuse to create their own exchanges would effectively be repealing a large part of the law.
So far, this approach has been embraced by Louisiana's Bobby Jindal, Wisconsin's Scott Walker, Ohio's John Kasich, Maine's Paul LePage and, as of yesterday, Oklahoma's Mary Fallin. Jonathan Cohn considers the consequences:
Obamacare critics believe that, by blocking the subsidies, they’ll undermine the law’s effectiveness and eventually erode support to the point that people clamor for a conservative alternative. It’s the same rationale they cite when they urge states to take advantage of the Supreme Court ruling and reject the expansion of Medicaid. The real world effect of both moves, if successful, would be to deprive residents of these states of financial assistance and access to affordable insurance. And most of these people desperately need the help. Whether poor or middle class, insurance is too expensive or simply unavailable to them, because of their age, work status, or medical condition. Keep in mind that, as the (heterodox) conservative economist Josh Barro wrote recently in his Bloomberg column, the “alternatives” that conservatives and libertarians propose inevitably do little for the uninsured.
Jonathan Bernstein sees this sort of obstruction as unusual:
This effort to undermine the law by undermining implementation may be unprecedented. Can anyone think of a similar historical example? This is different from typical opposition. It’s as if Democrats who opposed missile defense had actively campaigned for contracts to go to the contractors they believed were most likely to produce duds, just so they could eliminate the program after “proving” that it didn’t work.