Yesterday Mitch Daniels, Governor of Indiana and possible contender for the GOP 2012 Presidential nomination, along with 20 other Republican Governors, sent the following letter:

The Honorable Kathleen Sebelius
U.S. Department of Health and Human Services
200 Independence Avenue, S.W.
Washington, DC 20201

Dear Secretary Sebelius;

Many of us believe the Patient Protection and Affordable Care Act (PPACA) should be repealed by Congress if the courts do not strike it down first.

But, with no assurance of either outcome, we face the decision of whether to participate in the bill by operating state exchanges, or to let the federal government take on that task, if the bill remains in effect in 2014.

In addition to its constitutional infringements, we believe the system proposed by the PPACA is seriously flawed, favors dependency over personal responsibility, and will ultimately destroy the private insurance market.

Because of this, we do not wish to be the federal government’s agents in this policy in its present form.

We wish states had been given more opportunity to provide input when the PPACA was being drafted. We believe in its current form the law will force our health care system down a path sure to lead to higher costs and the disruption or discontinuation of millions of American’s insurance plans.

Though we still have grave concerns with other provisions of the PPACA, we suggest the following improvements:

  • Provide states with complete flexibility on operating the exchange, most importantly the freedom to decide which licensed insurers are permitted to offer their products
  • Waive the bill’s costly mandates and grant states the authority to choose benefit rules that meet the specific needs of their citizens.
  • Waive the provisions that discriminate against consumer-driven health plans, such as health savings accounts (HSA’s)
  • Provide blanket discretion to individual states if they chose to move non-disabled Medicaid beneficiaries into the exchanges for their insurance coverage without the need of further HHS approval.
  • Deliver a comprehensive plan for verifying incomes and subsidy amounts for exchange participants that is not an unfunded mandate but rather fully funded by the federal government and is certified as workable by an independent auditor.
  • Commission a new and objective assessment of how many people will end up in the exchanges and on Medicaid in every state as a result of the legislation (including those “offloaded” by employers), and at what potential cost to state governments. The study must be conducted by a neutral third-party research organization agreed to by the states represented in this letter.

We hope the Administration will accommodate our states’ individual circumstances and needs, as we believe the PPACA in its current form threatens to destroy our budgets and perpetuate and magnify the most costly aspects of our health care system.

While we hope for your endorsement, if you do not agree, we will move forward with our own efforts regardless and HHS should begin making plans to run exchanges under its own auspices.


Governor Robert J. Bentley

Governor Nathan Deal

Governor C.L. “Butch” Otter

Governor Mitch Daniels

Governor Terry E. Branstad

Governor Sam Brownback

Governor Bobby Jindal

Governor Paul R. LePage

Governor Haley Barbour

Governor David Heineman

Governor Brian Sandoval

Governor Susana Martinez
New Mexico

Governor John R. Kasich

Governor Mary Fallin

Governor Tom Corbett

Governor Nikki Haley
South Carolina

Governor Dennis Daugaard
South Dakota

Governor Bill Haslam

Governor Rick Perry

Governor Gary R. Herbert

Governor Scott Walker

Governor Daniels also penned an op-ed for the Wall Street Journal describing in more detail the fiscal dilemma the PPACA places on states, stating, in part:

“…the law expects to conscript the states as its agents in its takeover of health care. It assumes that we will set up and operate its new insurance “exchanges” for it, using our current welfare apparatuses to do the numbingly complex work of figuring out who is eligible for its subsidies, how much each person or family is eligible for, redetermining this eligibility regularly, and more. Then, we are supposed to oversee all the insurance plans in the exchanges for compliance with Washington’s dictates about terms and prices.”

In addition to the various and sundry lawsuits filed by state Attorney’s General, two of which have been decided in favor of the states (the recent Florida ruling involving 26 of our 50 states), two of which have been decided in favor of the Federal government, and all of which have been appealed and will likely end up in the Supreme court; in addition to a handful of states like Missouri passing legislation rejecting participation in some or all of the provisions of Obamacare, we now have 21 states recommending specific improvements to the legislation.  If the November 2010 elections did not send a message to Washington regarding public rejection of the PPACA and a desire for replacement of that heavy-handed legislation with something which deals with the real cost issues in our health care system, more recent events and the number of states involved should be getting their attention.  As Governor Daniels states in reference to the recommendations made to Secretary Sebelius:

“Most fundamentally, the system we are proposing requires Washington to abandon most of the command-and-control aspects of the law as written. It steers away from nanny-state paternalism by assuming, recognizing and reinforcing the dignity of all our citizens and their right to make health care’s highly personal decisions for themselves. “

It seems the Obama administration has a number of options available at this point:

  • allow the various lawsuits to play out in the courts according to the routine appeals process, which could well move any Supreme Court action into the 2012 election season
  • push for an accelerated appeals process, which could move the decision into the high court within the next few months
  • consider recommendations made by the governors, as well as amending legislation being developed by both House and Senate Republicans designed to remove the more onerous provisions of Obamacare and enhance cost reform efforts
  • support an outright repeal and rewrite of the legislation, which appears to be the option favored by most Americans.

An accelerated court solution could be the most expeditious route, but would also involve the greatest political risk to the administration, as a Supreme Court opinion in support of the Vinson ruling would invalidate the PPACA in its entirety.  On the other hand, a legislative solution that returns power and authority to the states, while quite possibly the solution most Americans would prefer – elected officials working together to arrive at a truly bipartisan answer, would likely extend the ongoing health care and insurance debate into the 2012 election season and quite possibly beyond, setting up a race to the finish line between the legislative and judicial branches.  Could the governors’ recommendations help to bring about an end to the debate, or only add fuel to the fire? 

“If there’s to be a train wreck, we governors would rather be spectators than conductors. But if the federal government is willing to reroute the train to a different, more productive track, we are here to help.”

Virginia Ruling – Moon 

Michigan Ruling

Virginia Ruling – Hudson

Florida Ruling


Obamacare, Round 2?

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