What's Next For Insurance Exchanges And Obamacare?

President Obama's second term is assured, but still ambiguous is the fate of the health care law that defined his first.

Many Republican governors and lawmakers opposed to the Affordable Care Act had been locked in a holding pattern as they awaited the results of the presidential election. Even after the Supreme Court upheld earlier this year the law's requirement that all Americans obtain health insurance, thereby keeping the central thrust of Obamacare intact, Republicans held out hope that a President Romney would deliver on his promise to repeal the law.

But Obama's re-election has diminished their options. At issue now are the state-run health insurance exchanges that are a centerpiece of the law's effort to extend health insurance to every American.

The Affordable Care Act was designed to take effect incrementally. First to kick in were popular provisions like allowing young people to remain on their parents' health insurance and prohibiting insurance companies from denying coverage to people with pre-existing conditions.

While those pieces were broadly popular, the state-run exchanges were more controversial. The exchanges are designed to function as marketplaces where Americans can comparison-shop for different insurance plans, all of them with a minimum standard of coverage mandated by the law. People with income low enough to qualify for government subsidies will be able to put those toward purchasing insurance plans.

Republican governors had been counting on a Republican president dismantling the exchanges, but they now face an approaching deadline to either begin setting up the exchanges or have the federal government take over. Last week, the Obama administration recently extended the deadline for states declaring their intentions. They now have until Dec. 14.

As of last Friday, 23 states and the District of Columbia reported that they were moving forward. Fifteen states said they would allow the federal government to take over the process, many of them led by Republican governors who have been deeply antagonistic toward the Obama administration in general and the Affordable Care Act in particular.

Those states still couched their decision in terms of the law's flaws, saying they would have no real flexibility in setting up the exchanges. Gov. John Kasich of Ohio wrote in a letter to the Department of Health and Human Services that "states do not have any flexibility to build and manage exchanges in ways that respond to unique needs of their citizens or markets," while Scott Walker of Wisconsin contended that even had he chosen to guide the process, "Wisconsin taxpayers will not have meaningful control over the health care policies and services sold to Wisconsin residents."

"This is a federally-mandated exchange with rules dictated by Washington," Texas Gov. Rick Perry wrote. "It would not be fiscally responsible to put hard-working Texans on the financial hook for an unknown amount of money to operate a system under rules that have not even been written."

That leaves a handful of undecided states. Among them are New Jersey, led by combative Republican Gov. Chris Christie, and Florida, where Gov. Rick Scott -- another outspoken Obama critic -- signaled his willingness to set up an exchange despite his concerns that "Florida does not have enough evidence" the law would work.

"I am hopeful it is possible for us to work together to lower costs and improve access and quality," Scott wrote.