The Supreme Court’s decision in King v. Burwell brings an important chapter of the Affordable Care Act’s (ACA) implementation to a close. The fight about health reform is not over, with Republican presidential candidates promising to repeal the law while supporters of the law push for Medicaid expansion and the development of Accountable Care Organizations.
But it is important to pause and reflect on what we have learned the last five years. This is uncharted territory for supporters of comprehensive health reform who for so many decades studied why legislation was so difficult to enact rather than how complicated it is to implement.
A Shift To The States
One of the greatest lessons has been the important role that state politics plays in developing health policy. The ACA is nicknamed Obamacare, though ironically two of the core elements of the reform were to a large degree shaped by state leaders. Initially, the Medicaid expansion was intended to be mandatory and insiders say that the White House preferred the 2009 House bill which would have created a single national exchange.
But after Ted Kennedy’s death, the Democrats lost their filibuster-proof majority, requiring the House to pass the Senate version of reform which included state-based exchanges. Then in 2012 the Supreme Court deemed the mandatory Medicaid expansion to be unconstitutionally coercive. These changes shifted the focus over these programs from Washington D.C. to state capitals.
The ACA’s implementation coincided (not entirely coincidentally) with the rise of the Tea Party. One of the most important aspects of this movement is the strong local emphasis. During the 2010 elections, activists were not only heavily involved in congressional races, but also in contests for governor, state house and senate seats, and for leadership at the county and precinct levels. They helped Republicans win a net gain of more than 720 state legislative seats to occupy a total of 3,941 — the most held by Republicans since 1928.
Democrats entered the 2010 election cycle controlling 60 of the nation’s 98 legislative chambers (Nebraska has a non-partisan uni-cameral legislature, which is why there are not 100 chambers). In January 2011, Republicans controlled 57. Republican governors also replaced Democrats in 12 states, including 8 that had voted for President Obama two years earlier.
Democrats won some of those seats back in 2012, but the 2010 elections were enormously consequential since it was also the year that a census was conducted. This gave Republicans a huge advantage in drawing the legislative maps for the next decade. Not all districts were gerrymandered, but the Republican majority in some chambers is so strong that Democrats have virtually no chance of taking control, even in places that elect Democrats state-wide. This plays a major role in shaping the political dynamics in which exchanges and the Medicaid expansion were implemented.
It is a mistake to equate opposition to the ACA with partisanship. In many states the main division was actually within the Republican Party, not between Democrats and Republicans. A study I conducted with Jonathan Oberlander and Katharine Bradley found that between March 2010 and March 2013 (the last time a state passed legislation to create an exchange), floor votes were held on 27 bills in at least one chamber of 22 states. Close to half of Republican legislators (42 percent) in these states voted for an exchange.
Even so, the Republican takeover in 2010 made it difficult for many legislators to support the establishment of an exchange, despite this being an idea once backed by the Heritage Foundation and conservatives such as Haley Barbour. Redistricting meant that many conservatives were more afraid of a primary challenge from the right than a general election challenge from the left.
This was fertile ground for organizations like the conservative American Legislative Exchange Council which published “A State Legislator’s Guide to Repealing Obamacare.” It argued that the ACA would cave on itself if enough states resisted establishing an exchange because the Obama administration lacked the will and capacity to operate an exchange in every state.
State leaders were encouraged to return grant money and refuse to cooperate. Michael Cannon and Jonathan Adler took this a step further, suggesting there was a glitch in the text of the law which would seriously disrupt insurance markets by preventing consumers in these states from receiving subsidies.
Variation From State To State
Cannon and Adler’s attack was ultimately resolved by the Supreme Court’s decision in King v. Burwell, but the debate in each state varied according to its unique institutional procedures, political dynamics, and personalities. Something as simple as the timing of state legislative sessions had a profound effect on the process in many states.
For example, the New Mexico legislature only meets for two months each year and in even numbered years can only consider legislation introduced by the governor or pertaining to the budget. As a result, when Governor Susanna Martinez vetoed an exchange bill in the first months of her first term in 2011, the next opportunity for a legislative-initiated exchange bill would not come until 2013. This gave her significant leverage in the debate. By the time legislation to create an exchange was finally enacted in 2013, there was no time to launch a website before open enrollment began that fall.
For another example of how state-level institutional differences can affect the debate over an exchange, just look to the fact that in 11 states, the insurance commissioner is elected instead of appointed by the governor. Nowhere did this make more of a difference than in Mississippi where each chamber of the legislature actually passed an exchange bill in 2011, but a conference committee could not agree on whether insurance companies should be allowed a representative on the exchange’s board of directors.
After legislation failed, independently elected insurance commissioner Mike Chaney tried to develop an exchange on behalf of the state. He worked for more than a year with an advisory board and was only stopped once Governor Phil Bryant threatened to block coordination with the state’s Medicaid program.
Term limits also played a major role in shaping who made decisions. Fifteen states have limits on how long their legislators can serve. For example, Michigan politicians can remain in office for six years in the House and eight years in the Senate.
During the crucial 2011-2012 session in which states focused heavily on whether or not to establish an exchange, there was virtually 100 percent turnover on the health policy committees in both chambers of the Michigan legislature; most newcomers had almost no experience in health policy. These legislators’ lack of procedural and policy expertise did not necessarily bias them against an exchange, though it did likely increase the importance of interest groups on both sides. In the key committee vote in which an exchange was defeated, the deciding legislator faced enormous pressure from groups supported by the Koch Brothers.
Looking Ahead
King v. Burwell, and the five years leading up to this decision, serves as a reminder that national policy debates can be advanced or blocked at the state level. The quirks of state-level politics would have shaped how states responded to an adverse ruling in King v. Burwell and will continue to influence who gets to make major health policy decisions and what they decide.
Congress and the federal executive branch continue to deserve our focus and attention. But this recent episode teaches us that we should never lose sight of the importance of states as a venue for advancing health reform; opponents will certainly continue to see it as a venue for obstruction.
Editor’s note: This post was written based on research conducted by the author for his dissertation at the University of Michigan, for which he received the Outstanding Dissertation Award at the recent 2015 AcademyHealth Research Meeting.
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