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Reform Update: Failed exchanges dog politicians, but fallout seems limited

By Paul Demko
Posted: May 30, 2014 - 3:45 pm ET

Oregon Gov. John Kitzhaber should be in political peril. A pair of recent polls delineates the extent of unhappiness with his performance as he seeks an unprecedented fourth term in the state's top elected office.

A poll released last month by DHM Research found that just 35% of registered voters think he should be re-elected. A subsequent survey conducted by Public Policy Polling found that just 42% of respondents approve of his job performance.

Oregon's failed insurance exchange, which is preparing to cease operations in favor of the federal marketplace, isn't the only issue dogging Kitzhaber, according to Tim Hibbitts, DHM Research's chief political analyst. The Columbia River Crossing, a bridge construction project that appears to be dead despite $200 million in government spending, and an education czar who lasted just 11 months and racked up tens of thousands of dollars in dubious expenses, are other millstones around the governor's neck.

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“I don't think it's fair to say the only thing causing him problems is the Cover Oregon fiasco, but I would certainly put that at the top of the list,” Hibbitts said.

But in spite of Kitzhaber's well-documented problems, he remains a strong favorite to win re-election. Democrats have prevailed in the last 19 statewide races in Oregon. Both recent polls showed the incumbent with a double-digit lead over the GOP nominee, state Rep. Dennis Richardson, who remains unknown to most Oregonians and may be too conservative to gain broad support. (The PPP poll found that 62% of respondents had no opinion about him.)

“There's no question that this has been damaging to the governor,” Hibbitts said of the exchange debacle. “But at the end of the day he's not running against himself.”

That dynamic appears to be recurring across the country. Politicians in states with failed or troubled exchanges are taking lumps for their affiliation with the problem-plagued websites, but the afflictions don't appear to be politically fatal.

Nevada Gov. Brian Sandoval is the rare Republican to implement Medicaid expansion and opt for a state-based exchange. But the online marketplace has been such a mess that it drew a class-action lawsuit from residents who believed they signed up for coverage and now are saddled with medical bills because they weren't actually enrolled. Like Oregon, the state plans to switch to the federal website for 2015 enrollments.

“It has been an unmitigated disaster,” said Jon Ralston, a veteran observer of Nevada politics. But Sandoval is expected to cruise to re-election this year. That's in part because his approval ratings have typically registered above 60%. But Ralston also points out that Democrats have been “singularly inept” in fielding a credible candidate despite Nevada's politically purple hue.

As the first Latino governor of Nevada, Sandoval has frequently been touted as a potential national candidate. His name has surfaced in discussions of possible 2016 vice presidential nominees. That's where the failed Silver State Health Insurance Exchange could hurt. Republican activists, in particular, are unlikely to look kindly on Sandoval's ill-fated embrace of Obamacare.

“There will not be any fallout for him in the state,” Ralston said. “The question is whether it will affect his long-term prospects as a national candidate, and I don't think we know that yet.”

In Maryland, Lt. Gov. Anthony Brown hoped to capitalize on his role in shepherding implementation of the state's insurance exchange to advance to the state's top elective office. Popular two-term Democratic incumbent Martin O'Malley isn't running for re-election and is exploring a presidential bid.

But Brown's role in the development of the online marketplace, which is now undergoing an expensive overhaul using software from Connecticut's successful exchange, has instead become a political albatross. Brown's chief challenger for the Democratic nomination, Attorney General Doug Gansler, has repeatedly cited the dysfunctional website as evidence that he isn't up to the task of running the state, noted Todd Eberly, an assistant professor of political science at St. Mary's College of Maryland.

But there's little evidence that the attack has significantly imperiled Brown's chances of winning the primary in a state dominated by Democrats. An April poll conducted by St. Mary's College found Brown with support from 27.1% of respondents. That was down significantly from previous polls, but still way ahead of Gansler at 10.8%. A third credible challenger, state Del. Heather Mizeur, was at 7.7%.

Brown “had the entire party establishment behind him since well before it became clear that our state exchange was a complete, unmitigated disaster,” said Eberly. “It's hurt him, but it's not going to prevent him from winning the Democratic nomination.”

Conservatives push for vote on ACA replacement

Conservatives are pressuring GOP House leaders to vote on a bill to replace the Patient Protection and Affordable Care Act. The Republican Study Committee, led by Rep. Steve Scalise (R-La.), is pushing a bill that would allow health plans to be sold across state lines, overhaul medical malpractice litigation rules and increase the use of health savings accounts, among other things. Scalise told Politico that he favors allowing the legislation to work its way through the committee process and be shaped by competing ideas. However, some Republicans worry that putting their fingerprints on any specific healthcare policy proposal ahead of November elections will simply provide an unnecessary target for Democratic attacks.

McConnell's kynect problem

Senate Majority Leader Mitch McConnell, locked in a difficult re-election battle against Democratic challenger Alison Lundergan Grimes, is trying to walk a rhetorical tightrope when it comes to the federal healthcare law. During a news conference in Kentucky last week, he repeated calls to dismantle the ACA, but got tied up when queried about whether the state's highly regarded exchange, kynect, should also be mothballed. “I think that's unconnected to my comments about the overall question here,” McConnell responded. That answer has been widely ridiculed, including by the editorial page of the Lexington Herald-Leader, given that the exchange would not exist without the federal healthcare law.

Follow Paul Demko on Twitter: @MHpdemko

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