Studies in Government and Public Policy

Federalism, State Politics, and the Affordable Care Act

Daniel Beland, Philip Rocco, Alex Waddan

• Publisher: University Press of Kansas
• Year: 2016
• ISBN:
  9780700621965
• Topic: Medicine
• Subtopic: Health Policy

Not five minutes after the Affordable Care Act (ACA) was signed into law, in March 2010, Virginia’s attorney general was suing to stop it. And yet, the ACA rolled out, in infamously bumpy fashion, and rolled on, fought and defended at every turn—despite President Obama’s claim, in 2014, that its proponents and opponents could finally “stop fighting old political battles that keep us gridlocked.” But not only would the battles not stop, as Obamacare Wars makes acutely clear, they spread from Washington, DC, to a variety of new arenas. The first thorough account of the implementation of the ACA, this book reveals the fissures the act exposed in the American federal system. Obamacare Wars shows how the law’s intergovernmental structure, which entails the participation of both the federal government and the states, has deeply shaped the politics of implementation. Focusing on the creation of insurance exchanges, the expansion of Medicaid, and execution of regulatory reforms, Daniel Béland, Philip Rocco, and Alex Waddan examine how opponents of the ACA fought back against its implementation. They also explain why opponents of the law were successful in some efforts and not in others—and not necessarily in a seemingly predictable red vs. blue pattern. Their work identifies the role of policy legacies, institutional fragmentation, and public sentiments in each instance as states grappled with new institutions, as in the case of the exchanges, or existing structures, in Medicaid and regulatory reform.Looking broadly at national trends and specifically at the experience of individual states, Obamacare Wars brings much-needed clarity to highly controversial but little-understood aspects of the Affordable Care Act’s odyssey, with implications for how we understand the future trajectory of health reform, as well as the multiple forms of federalism in American politics.

1. Postreform Politics in the US Federal System: Patterns of Consent and Dissent

Four years after the passage of the Patient Protection and Affordable Care Act (ACA), “Repeal Obamacare” remained a Republican applause line. As the law’s period for enrollment in insurance plans came to a close, governor and presidential hopeful Bobby Jindal (R-LA) put forward the “Freedom and Empowerment Plan,” a twenty-four-page proposal filled with policy-driven arguments and citations from reputable studies.¹ His was one in a series of Republican plans to repeal the law and replace it with federal legislation that, among other things, would create private health savings accounts and give states flexibility to experiment with privatized health options for the low-income uninsured. To accomplish his plan, Jindal argued that state governments had to engage in dissent—in this case, formally refusing to participate in implementing major reform. As the governor put it, “Hopefully, states will rewrite their laws to eradicate Obamacare from their statute books.”²

Jindal’s suggestion drew on real-life examples because state declarations of opposition to the ACA’s health insurance exchange provisions represented a central way in which Republican opponents of the ACA have engaged in what Eric Patashnik calls “postreform politics.”³ In hoping that governors and state legislatures would practice dissent, however, Jindal was also ignoring a crucial reality. Even in states where opposition to the ACA was strong, opponents also took another less visible approach to postreform politics: negotiating their consent to the ACA with federal officials. Whether during informal meetings between federal and state personnel, in the formal process of constructing federal insurance regulations, or in requests for Medicaid waivers, opponents of health reform were bargaining for a version of the ACA closer to their policy preferences.⁴

How can we account for the variation in how state officials fought back against the reform across the ACA’s reform streams?⁵ This chapter synthesizes existing literature on the politics of federalism to outline our answer to this question.⁶ We argue that although state governments’ partisan composition and ideology ultimately shaped their reaction to the ACA overall, how mobilized opponents used US federalism to push back against new reforms depended on three features of the policy context. First, preexisting policy legacies (the federal statutes, judicial decisions, and bureaucratic relationships that predate the passage of a law) can alter the incentives opponents have to engage in particular forms of political combat. When new policies build upon strong preexisting legacies of state and federal policy, opponents may find it difficult to use state governments as tools for dissent and may instead look for points of leverage in quiet, intergovernmental bargaining.

Second, opponents may have different opportunities to engage in contestation depending on the extent to which policies fragment decision-making authority. When new reforms necessitate action from governors and state legislatures to change the status quo, or when federal officials are given fewer means to coerce or persuade states to comply with policy, opponents may be more likely to engage in outright dissent, refusing to implement federal policy or using state governments’ standing in federal court to litigate against the federal government. In contrast, when federal reform can be implemented without legislatures or governors acting to change the status quo, or when the federal government gains the capacity to impose punishments on (or hold back rewards from) uncooperative state governments, opponents may wish to engage in the intergovernmental negotiation of consent.

Finally, we argue that public sentiments (public awareness of and support for a reform) can also matter for how postreform politics plays out in the federal system. As a policy’s visibility increases and support narrows, its opponents may find it easier to translate the reform into a matter of public debate, whether through state legislative action to contest the reform, litigation against federal agencies, or rhetorical challenges by state officials. As salience declines and public support increases, opponents may be more likely to engage in low-profile intergovernmental bargaining.

The chapter proceeds as follows. We first place the ACA in broader perspective by discussing its similarities to many other public policies in the United States, where authority fragments along the jurisdictional lines of the federal system. Next, we define postreform politics in the context of US federalism by focusing on state governments’ consent in policy implementation as well as the construction of political dissent at the state level. We then outline our argument on how institutional fragmentation, public sentiments, and policy legacies shape postreform politics. Finally, we discuss the three policy contexts (health insurance exchanges, Medicaid expansion, and regulatory reform) nested within the ACA, along with the methodological approach we will use to investigate patterns of intergovernmental contestation.

federalism as a battlefield

Although the ACA, in its attempt to expand access to health insurance is unique in many ways, at least one aspect of its political and institutional context is familiar. The context is US federalism: the constitutional division of sovereignty between the national government and state governments. Federalism, as David Brian Robertson puts it, is an “opportunistic political battlefield with ambiguous boundaries” that make it possible for political battles to take the form of turf wars, with interest groups, political parties, and officials in different jurisdictions (local, state, and federal) fighting over who has the authority to undertake which specific activities.⁷

The politics of turf often displace conflicts over the substance of policy; instead of fighting over the federal minimum wage, for example, actors debate whether it is appropriate to set such a wage at the federal level.⁸ Even so, political actors rarely fight over turf for its own sake. Winning turf means winning the ability to shape policy to suit your own preferences.⁹

Because the constitutional boundaries for federal and state control are especially ambiguous, federal courts have long been a site of turf wars with high policy stakes. McCulloch v. Maryland (1819), for example, established that the federal government had implied powers, not simply powers specified by the Constitution.¹⁰ With the power of the federal government to maintain a national bank hanging in the balance, the stakes in McCulloch were high indeed.

Courts are not the only sites for turf wars over federalism. Since the late 1930s, for example, judicial interpretations of the interstate commerce clause of the Constitution have permitted Congress a much broader use of its legislative powers.¹¹ Yet these decisions did not result in unrestrained centralization of power.¹² Rather, federalism permits political adversaries within Congress to further dispute which level of government should exert influence on its policies. In 1996, opponents of Aid to Families with Dependent Children (AFDC), a social program that supplemented incomes for poor households, successfully turned the program into a block grant to states called Temporary Assistance to Needy Families (TANF). By replacing the AFDC’s “entitlement” with TANF’s more decentralized block grants and lifetime benefit limits (five years), adversaries were seeking substantive ends. In particular, they hoped more conservative state governments would make social payments conditional on an individual’s participation in the labor force.¹³

One reason the division of turf matters so much to litigants, lawmakers, and other political actors is that it provides a staging ground for political conflict after major institutional decisions have been made. When Congress passes a law or the Supreme Court makes a decision, they often reshuffle the “rules of the game” by distributing power to new actors and institutions.¹⁴ Because Congress empowered both state and federal governments to make important decisions related to the ACA’s implementation, gaining control of state government meant gaining the ability to shape the outcome of the law. As the next section shows, that division of authority has become crucial to the ACA’s postreform politics.

waging postreform politics in the federal system

In the United States, the passage of a landmark law is a momentous occasion often marked by a sometimes celebratory, sometimes solemn presidential signing ceremony. When the ACA was signed into law in March 2010, photos of the president’s signature itself went viral almost immediately, making the legislation itself an icon of his administration’s success.¹⁵ If for no other reason, bill signings are historic because passing substantial policy reform is an uphill battle in the United States, beset with challenges from multiple congressional committees and executive agencies, a barrage of interest groups, and members of two legislative chambers.¹⁶

However worthy of ceremony in its own right, a legislative enactment does not mean the end of political conflict. The implementation of federal reforms on the ground, as Jeffrey Pressman and Aaron Wildavsky’s classic 1973 study reminds us, is often a story of how actors with multiple, competing goals can delay, modify, scale down, or otherwise change a law in ways its congressional authors might not have intended.¹⁷ Yet, especially in a climate of intense interest-group opposition and partisan polarization, the politics of implementation involves more than competing visions for an ideal policy. Rather, it often concerns the political legitimacy of the reform itself. As Patashnik puts it, opponents of broad-based reforms, often those who bear their economic costs, “do not disappear after the reforms are passed and may be joined by new clienteles who would also profit from the reforms’ unraveling.”¹⁸

Postreform politics owes much to how groups organize after major reforms are passed. If opponents of a reform are well organized, they have a number of options for launching political challenges even after the reform has passed Congress. However, postreform politics also depends on how opponents leverage alternative political venues, such as the bureaucracy and the courts, to shape political and policy debates.¹⁹ Federalism thus dramatically expands the menu of options for those waging postreform politics. By dividing authority between levels of government, the US federal system enables actors to engage in political contests over national reforms by taking control of state government. As we will see in Chapter 2, state electoral contests in 2010 became especially competitive and yielded an important “backlash” to the ACA.

Federalism enables opponents of national reforms to engage in two important, but different, forms of political contestation that we will explore in this book.²⁰ First, federalism creates opportunities for renegotiating—rather than repealing or obstructing—policies after they are made. Because Congress tends to write laws that divide authority between the federal government and the states, those who wish to amend federal laws may lobby state governments for favorable rules.²¹ Dividing authority can allow political actors to rene...

Table of contents

• Front Cover
• Title Page
• Contents
• Introduction
• 1. Postreform Politics in the US Federal System: Patterns of Consent and Dissent
• 2. Uncertain Victory: The Political Context of Health Care Reform Implementation
• 3. Health Insurance Exchanges: When Dissent Means “Not Lifting a Finger”
• 4. Medicaid Expansion: Take It or Leave It
• 5. Regulatory Reform: The Quiet Politics of Bargaining and Consent
• Conclusion
• Notes
• Index
• Back Cover