I have been reading this Cato Institute legal research paper by Michael Cannon and it’s making me realize that the GOP governors could really make Obamacare a political liablity for the Democrats by refusing to set up a state run health exchange.  It is a fascinating read and I highly recommend it.  In summary, it looks like the Obama Adminstration ultimately is going to have to count on a second John Roberts rescue.  Here’s why.  First, from Philip Klein:

With the election over and Obama reelected, repealing the law is not going to happen over the next four years. So 30 Republican governors will have to make a decision about whether they want to help the federal government implement Obamacare, or keep the onus on the Obama administration.

One of the silver linings of the Supreme Court decision is that it gave states the ability to opt out of the Medicaid expansion. Medicaid is one of the programs that is crushing state budgets and if implemented as intended, Obamacare will add 18 million beneficiaries to the program’s rolls. Though the federal government lures states with a honey pot in the short term – covering all of the expansion through 2016, by 2020 the states will be asked to kick in 10 percent of the cost, amounting to billions of dollars of spending imposed on states nationwide each year. It would be to the long-term benefit of governors to opt of the expansion.

Separately, the health care law was designed to coerce governors into embracing exchanges on which individuals will be provided with federal subsidies to purchase insurance. If a state doesn’t establish its own exchange, the law specifies that the federal government will step in and set one up for them. Given that Republicans typically favor more state and local control, there’s a clear temptation for them to cave in, assuming that the lesser of two evils by implementing the exchanges themselves. But they should resist that temptation….

Read More:   Redstate.com