Though the law creates the veneer of state flexibility on the exchanges, the reality is that all of the major decisions will be made from Washington. That includes the broad structure of the exchanges as well as the details of what kind of health care plans will be offered in them and how they will be marketed. A careful reading of the law finds that all of the sections about state "flexibility" are filled with caveats that render them useless in practice, because Secretary of Health and Human Services Kathleen Sebelius will be running the show.
For instance, Obamacare specifies that, "The Secretary shall, by regulation, establish criteria for the certification of health plans as qualified health plans." In other words, Sebelius will get to decide what type of health care plans can be offered on these state exchanges. Then, there’s this dandy: "An Exchange may not establish rules that conflict with or prevent the application of regulations promulgated by the Secretary under this subtitle." What kind of flexibility does that offer?
Given that governors will have no real control over the exchanges anyway, they should let Obama administration officials sleep in the bed they made for themselves. It’s highly doubtful that the same administration responsible for the failed economic stimulus package will be able to operate dozens of exchanges competently. Republican governors should allow the feds to live with the mess they created rather than clean up for them.