What Alaska’s Refusal to Implement Health Reform Really Means

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Yesterday, Alaska Gov. Sean Parnell gave a speech in which he refused to implement the Affordable Care Act. Citing a recent Florida court ruling that the law is unconstitutional, Parnell said, “We will not proceed down an unlawful course to implement it.” Here’s Parnell:

In its daily health care e-mail newsletter, Politico said the governor’s declaration raises the issue to “a fever pitch,” labeling Alaska the “last frontier for health reform.” Indeed, Parnell’s line in the sand gave the appearance – like so many moments since the ACA passed in March 2010 – of the beginning of the end. Here was a state taking a stand against ACA. But we’ve been here before. So how significant is Parnell’s declaration?

Not very – at least not now.

The only immediate effect of Parnell’s stance is that Alaska won’t apply for a $1 million federal grant to study setting up a health insurance exchange. This isolated stance won’t have an impact on implementation of the ACA.

But even if all states refused to implement the ACA, the law could – barring congressional or court action – proceed. States don’t technically have to do anything to ensure the law works. They can set up exchanges and change their insurance regulations to comply with new federal rules. But if they don’t, the ACA has mechanisms to allow the feds to step in. The one exception is Medicaid. Although the state-federal program is technically voluntary, the feds need states to vastly expand their Medicaid programs to achieve the near universal coverage goals in the ACA.

But even that doesn’t have to happen until 2014. Until then, states are on the hook to voluntarily make some moves if they choose. Alaska choosing not to means just that.

Also yesterday, the Department of Justice asked the Florida judge, Roger Vinson, to clarify whether he meant to stop all implementation of the ACA, as Parnell claims. (This would include not just state planning grants, but small business tax breaks, rebates for Medicare Part D beneficiaries and other provisions that would be logistically difficult to halt.) Even though Parnell said Vinson’s decision means it would be illegal to implement the ACA, there is actually some confusion over the effect of that ruling. Vinson stopped short of issuing an injunction, which would definitely indicate an intent to stop implementation. If Vinson says he meant to stop the ACA, the DOJ will apply for a stay, which, if granted, would table Vinson’s decision as cases surrounding the ACA wind their way through courts across the country.