National Health Care isn’t for states to decide

“More on Mitch Daniels's health-care deal

By Ezra Klein

Earlier today, I asked what exactly Indiana Gov. Mitch Daniels meant when he said "all the [Affordable Care Act's] expensive benefit mandates [should be] waived, so that our citizens aren't forced to buy benefits they don't need and have a range of choice that includes more affordable plans."

I just got off the phone with Seema Verma, who is advising Daniels on health-care policy. She emphasized that Daniels is talking about the so-called essential benefits package, not regulations such as the one preventing insurers from discriminating against preexisting conditions. And in her telling, Daniels doesn't want the standards for insurance products waived so much as he wants the responsibility for setting those standards handed over to the states. "We haven't sat around coming up with an essential benefits plan of our own," Verma says. "But the fear is that by defining it on the national level, who knows what they’re going to come up with? That decision-making process should happen at the local level."

This essentially preserves the status quo on insurance mandates. Right now, states decide what insurers have to cover. And as this ever-helpful report (PDF) from the Council for Affordable Health Insurance shows, Indiana has its own basket of demands. Where New Mexico names 57 different classes of care that insurers must cover and Idaho names only 13, Indiana holds it to 34, including surgeries for cleft palettes, colorectal cancer screening, treatment for morbid obesity, mastectomies, alcohol and substance abuse treatment, and quite a few more. So perhaps it's not surprising that Daniels wants control of this decision.

What's not so surprising is that a governor such as Daniels is the first major Republican to come out with a concrete set of reforms he'd like to see made to the law. Unless the Affordable Care Act is repealed in Congress or voided by the courts, governors have two choices: Set it up themselves or let the federal government do it for them. They can't ignore it. They can't put it off. They simply have to figure out a way to live with it. That seems to be what Daniels is doing here. But though he addresses his comments to the Obama administration, I suspect that reforms along the lines he's proposing might be a harder sell among congressional Republicans.”