Dave Weigel notes that Senators Lindsey Graham and John Barrasso have introduced a bill that would allow states to opt out of most provisions of Obamacare. The Senators are calling this the "third front" against Obamacare (the other two are presumably the bill for repeal and the court cases against the individual mandate.) I think it is a good idea, but the Graham-Barrasso third front won't amount to much by itself. If nothing else happens, the Senate Democrats will block the bill from passing and that is the last you will hear of it. The only way Graham-Barrasso will attain broad salience is if there are positive and relevant state policies that are seeking shelter under the bill.
It isn't enough for Republican-run state governments to oppose the individual mandate. That part of the health care fight will work its way through the courts and Congress. There is something state governments can do to frustrate the ultimate implementation of Obamacare regardless of what Anthony Kennedy ends up thinking about the individual mandate. One of Obamacare's purposes is to get everyone into a kind of health insurance that amounts to comprehensive health care prepayment as preliminary to establishing a single-payer system. One way to frustrate this purpose of Obamacare is to maximize the number of Americans who are on consumer-driven policies where Americans pay more of their first dollar health care costs in return for greater take home pay. States governments could increase the number of people on consumer-driven policies partly by changing their state rules on health insurance and partly by offering consumer-driven policies to state and municipal workers and Medicaid clients. The larger the number of people on such policies, the harder the political task of making such policies illegal.
Now technically, the Department of Health and Human Services can now deny state governments the right to establish such policies, but that is where the Graham-Barrasso bill comes in. One weakness of Obamacare is that the rules for establishing comprehensive prepayment (the coverage mandates) go though the Department of Health and Human Services. The rule making and waiver (over seven hundred waivers at last count) processes at HHS are opaque and there is no reason to assume they have any popular support at the moment. If the state governments are pressing for policies that will save both government and individuals money, it sets up a fight that Republicans are in a good position to win. States can pass policies expanding the numbers on consumer-driven policies and start putting those policies into effect right away. This is one of those cases where it is better not to ask permission. If HHS doesn't move against the states, fine. Congressional Republicans can then push legislation to codify the powers of state governments to offer such policies. At the very least it makes the future full implementation of Obamacare that much harder politically. If HHS raises objections then states can apply for an HHS waiver even as they continue to implement the policy. If waivers are good enough for McDonalds they should be good enough for Texas, Indiana, Ohio, and Florida. This exposes a Democratic weak spot. Who does Obama think he is to think he knows that government employees and Medicaid clients shouldn't have access to HSA/catastrophic insurance policies that save the government money and increase the take home pay of individuals while maintaining their health care security? It would be a healthy debate to have. It also puts Democrats in a kind of lose/lose situation. One of the main liberal talking points against Graham-Barrasso is that it is superfluous. Liberals argue that there is already a waiver process that does the same thing. If HHS refuses waivers to states that seek to expand consumer-driven health insurance, the waiver process is exposed as a joke, and the states (as well as those people now on consumer-driven policies) can move to press Congress to pass Graham-Barrasso. If HHS grants the waivers in order to maintain the shaky legitimacy of the waiver process and avoid granting the Graham-Barasso bill more attention, conservatives will have won a major victory by expanding the numbers on consumer-driven health insurance and can still try to get Congress to codify the legality of consumer-driven policies.
But for the third front to work, the states need to have positive and relevant market-oriented health care policies and be willing to challenge the Obama administration to stand in their way. The Republican gains in the state houses and state legislatures could, if the Republicans are smart and coordinated, be the a major factor in averting government-run health care.