State Insurance Exchanges: The Case against Implementation

Published April 20, 2011

State policymakers face a complex task as they decide whether to implement President Barack Obama’s health care law. For those in one of the 29 states currently mounting legal challenges to the law, the decision of how to proceed in the short-term is even more complex. They must decide whether to implement a series of burdensome regulations and vague requirements even as their representatives in the courts argue that key provisions of the law are unconstitutional.

The pressing decision for most states is whether to implement the health insurance exchanges required under Obama’s law. Some state policymakers, told that if they do not set up their own state-specific exchanges, the federal government will establish one that bypasses their authority, have attempted to find a middle path between compliance and resistance, adding pro-market or anti-abortion provisions to improve their exchanges.

This Policy Brief explains that the middle path is treacherous: It offers no protection against future decisions by the federal bureaucracy, collaborates with an unconstitutional framework, and risks undercutting court cases across the country.