South Dakota conservatives were pleased when Governor Dennis Daugaard decided he would keep his hands clean of one element of the Patient Protection and Affordable Care Act and let the federal government run the health insurance exchange requires every state to offer its citizens. The only practical reason the Governor cites is cost: he says running a state exchange would cost us $6.3 million to $7.7 million, in the ballpark of what he spends on French cheese subsidies and out-of-state headhunters.
The idea is that states, which have traditionally regulated the insurance industry, are better positioned to oversee the marketplaces, websites where people will shop for health coverage and access federal tax subisides to purchase it. That's a perspective shared by insurers.
“We’ve always been supportive of having state-based health exchanges,” Alissa Fox, senior vice president at the Blue Cross/Blue Shield Association’s office of policy and representation, said at a briefing with reporters Thursday in Washington, D.C. “We’re going to make that a priority.”
The position is shared by America's Health Insurance Plans (AHIP), the largest trade organization representing the health insurance industry. “States are in the best position to run exchanges because they have the experience, infrastructure, and local market knowledge to ensure exchanges are meeting the needs to consumers and employers in the state," Robert Zirkelbach, an AHIP spokesman, said in an email [Dylan Scott, "States Will Be Pushed to Take Control of Health Exchanges," Governing, 2013.02.08].
Governor Daugaard wants to keep the authority to regulate the federal exchange's activities in South Dakota, but that doesn't include the advantages a state exchange has in using existing infrastructure and customizing the program and its marketing to local folks, as the feds are warning similarly balky Wisconsin.
I can understand South Dakota Republicans' not wanting to spend money to make President Barack Obama's signature legislation work better. But a few years from now, when the PPACA is producing better results for the residents of Minnesota and Colorado than for South Dakotans, remember that we have no one but ourselves to blame.