'Obamacare' Ruling Puts New Emphasis On State Governments

July 3, 2012 -- There are very few certainties in politics, but the Supreme Court's ruling on the Affordable Care Act, the controversial health care law colloquially referred to as "Obamacare," resulted in one of those rare sure things: It assured that the debate surrounding the law will rage on for the foreseeable future.

Almost immediately after the Supreme Court announced its ruling, Mitt Romney vowed to repeal the law if elected in the fall. Republicans in the House and Senate got a new talking point -- Republican control of both chambers will greatly improve their ability to facilitate this repeal.

And several Republican governors, including Bobby Jindal of Louisiana and Scott Walker of Wisconsin, said that they would wait until November to take any sort of action to begin actually to implement the law.

Democrats need to maintain control in only one of the following three places -- the White House, the Senate, or the House of Representatives -- to, at the very least, seriously hinder Republicans' ability to repeal the law entirely. If Romney is elected president, there are a handful of legal options he can take unilaterally, without the help of Congress, to go after the law, but he'll be greatly limited. And Republicans will face a time crunch, given that the law will take full effect in 2014.

If the Affordable Care Act continues to be the law of the land, however, state governors will have the job of implementing several requirements outlined by the reform. For example, under the law, each state is required to set up state exchanges where residents can, if they choose, select a healthcare plan (residents can also go through employer if that is an option for them). The exchanges do not need to be up and running until 2014, but states are required to demonstrate by Jan. 1, 2013, that their exchanges are in progress, and will be operational by the 2014 deadline. If they fall behind, the Department of Health and Human Services would then come in and set up the exchanges.

"If the state decides not to establish an exchange, then the federal government establishes the exchange for them. So it's kind of a pick-your-poison scenario, if you will," said Renee M. Landers, a professor of law at Suffolk University Law School in Boston. Presumably, governors who are resistant to setting up exchanges would be more resistant to the federal government establishing the exchanges for them.

Under the law, as it was written, governors would also oversee an expansion of Medicaid within their states. However, the Supreme Court ruled that states could opt out of this expansion. The legal procedure for deciding whether to go forward with the expansion will differ by state. It would be paid for entirely by the federal government for the first several years, and afterward states would only be required to chip in 10 percent of the cost.

The governors might not be acting alone.

"States might need to have legislation to be able to take advantage of the expansion," said Landers. "It's really impossible to generalize accurately because each state situation is so different. A governor can possibly make some kind of administrative changes, but certainly if it's going to take more money than they would need to go through the legislature."

It's not known what the governors in these states might do about the expansion of Medicaid, but many states that joined the suit against the law have Republican-controlled legislatures, and that's unlikely to change.

In Louisiana, for example, members in both the state house and senate have four-year terms, and are currently serving out their 2012-2016 term. In Michigan, no state senators are up for re-election this year, and house Republicans have a 16-seat majority.

In Virginia, the state senate has 20 Republicans and 20 Democrats, but the state's Republican lieutenant governor serves as the tie-breaking vote. The Virginia state legislature won't hold elections again until fall 2013, when there will also be a gubernatorial race in the state.

Several states could end up opting out of the Medicaid expansion -- and in that case, Landers says, the ACA would not meet all of its goals.

"It will mean that the Affordable Care Act will fall short of achieving some of its goals, because the Medicaid expansion was supposed to address low income people," Landers said.

Low-income residents of a state that opts out of the expansion will likely not be required to pay the fee for not having insurance.

"Their incomes will be too low to pay the tax. Unless a person has an income that meets the federal threshold for filing a tax return, they don't have to meet the individual mandate requirements" said Landers. "And even if you have the income that's above that level, if there are hardship requirements or you can show that there is no affordable product on the market for you to pay that's not less than 8 percent of your income, also can get an exemption."

The federal threshold for filing a tax return is an income of at least $9,350 annually for a single filer, $18,700 for a married couple with no dependents, and $22,350 for a couple with one dependent. After that it increases by an amount of $3,650 per dependent.

The National Journal estimates that the 26 states that opposed the health care law represent a majority -- 55 percent -- of Americans who have no medical insurance.