Obama calls GOP bluff on health care, state flexibility

OBAMA CALLS GOP BLUFF ON HEALTH CARE, STATE FLEXIBILITY…. President Obama has endorsed minor tweaks to the Affordable Care Act since its passage — most notably the “1099 problem” — but today’s announcement reflects an openness to a more significant kind of change.

Seeking to appease disgruntled governors, President Obama announced Monday that he supported amending the 2010 health care law to allow states to opt out of its most burdensome requirements three years earlier than currently permitted.

In remarks to the National Governors Association, Mr. Obama said he backed legislation that would enable states to request federal permission to withdraw from the law’s mandates in 2014 rather than in 2017 as long as they could prove that they could find other ways to cover as many people as the original law would and at the same cost. The earlier date is when many of the act’s central provisions take effect, including requirements that most individuals obtain health insurance and that employers of a certain size offer coverage to workers or pay a penalty.

Specifically referencing a proposal from Sens. Ron Wyden (D-Ore.) and Scott Brown (R-Mass.), the president endorsed the kind of flexibility Republicans say they want. “[I]f you can come up with a better system for your state to provide coverage of the same quality and affordability as the Affordable Care Act, you can take that route instead,” Obama said, adding, “If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act does, without increasing the deficit, you can implement that plan and we’ll work with you to do it.”

The White House has a fairly detailed fact-sheet on this, and Secretary of Health and Human Services Kathleen Sebelius has a related post on the White House blog.

So, how big a deal is this? It marks a fairly significant departure from the administration’s status quo, but at its root, what we’re seeing is the White House call Republicans’ bluff. The GOP is convinced it can offer comparable coverage at comparable prices using Republican-friendly policies. Today, in effect, the president said, “Be my guest.” Why? Because Obama knows it’ll take more than tort reform and HSAs to make the system work, and he sees a political upside to watching GOP officials scramble to actually craft their own plans, rather than bash his.

One thing to keep an eye on: how this might affect states that want ambitious, liberal health care systems, most notably Vermont, where a single-payer plan has the support of the newly-elected governor, Peter Shumlin (D). In theory, Vermont and perhaps Oregon would be the only states with a credible shot at making this work — meeting the standards established by the Affordable Care Act, and reaching the same goals, but from a liberal direction, rather than a right-wing one.