For Obamacare, Trust in Federal Government is Key to Success

The implementation of the Affordable Care Act may cause its downfall, but not for the reasons everyone suspects. 

According to the Act, states can choose to manage the exchanges themselves, partner with the federal government, or hand the task over entirely.  Seventeen states including the District of Columbia have opted to run their own programs, while 27 delegated this task to the federal government (seven states have a partnered implementation). This experiment in federalism carries unintended negative consequences:  it will accentuate differences between red and blue states and further polarize Democrats and Republicans.

First, some context.  Decades of polling demonstrate that Americans trust the federal government much less than state governments.  Americans believe that state governments work better and are more capable of catering to their specific needs.  Consequently, people are more resistant to federally run programs, which can create a self-fulfilling prophecy:  the more people doubt the federal government’s effectiveness, the more they will focus on its errors, increasing the attention paid to policy failure.

To examine how distrust in federal programs might affect the Affordable Care Act, we ran a 2,000 person national survey (conducted by The Morning Consult) with a random sample of Americans. Respondents read a description of the health insurance exchanges and then, by random draw, were told the exchange was to be administered by either the federal or the state government, a possible outcome for each state when the experiment was administered.  We then ­­­­­asked respondents a battery of questions about healthcare reform.

We find that citizens lack confidence in the federal government’s ability to successfully run the healthcare exchanges. Among respondents who were told the federal government would implement the exchanges, 51% said the program would not succeed.  The corresponding figure for those told that their state government would be managing healthcare reform was 46%.

The differences were even starker when we subset on party.  When Republicans were informed the state government would run the exchange, 43% were confident in the program’s success.  Republicans told that the feds would implement the exchange were more than 20% less likely to believe it would succeed, and 10% less likely to say they would purchase insurance through the exchanges. 

By contrast, Democrats held more optimistic views when informed that the federal government (rather than the states) would run the exchanges.

These results are not surprising given that Republican approval ratings of the federal government have declined from 53% to 20% since President Obama took office.  However, they are problematic for healthcare reform.  Moreover, the party divide becomes even more consequential when we examine the partisan makeup of the states that are planning state- and federally-run exchange programs. 

Importantly, 22 of the 27 states opting for federally-managed exchanges have Republican governors, many of whom are avowed critics of the Affordable Care Act.  In these states, lawmakers have limited incentives to support the ACA, since its failure will be attributed to the federal government and will confirm the governors’ doubts about healthcare reform. Meanwhile, of the 17 states (including D.C.) administering their own exchanges, 13 have Democratic leaders who support the healthcare overhaul, as well as sympathetic populations and electoral and fiscal incentives to make the law succeed. 

The different exchange implementation mechanisms will thus exacerbate differences between Republican and Democratic states. In Republican states, where exchanges will be viewed skeptically, citizens’ views of the federal government are likely to deteriorate.  Conversely, in Democratic states where lawmakers have incentives to see the exchanges succeed, views toward the federal government will improve.  Polarization – and with it, the potential for even greater gridlock – will increase as Republican and Democratic states become further differentiated in their citizens’ views of government.

The widespread delegation of the health insurance exchanges to the federal government poses a monumental challenge for the Obama administration. Not only does it create a large workload for the federal government.  Not only does it make the administration responsible for identifying and recruiting difficult-to-reach uninsured populations.  It also charges President Obama with the task of persuading Republicans in conservative states that signing up for healthcare is preferable to resisting the individual mandate and paying a fine.  He must earn the trust of those who trust him least.  If he fails, then this experiment in federalism will further polarize an already partisan political environment.

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The Affordable Care Act: An Experiment in Federalism?



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