In her propagandizing for ACA (hope they pay her for all the hard work she does), Maggie Mahar had this to say in regards to State's not setting up exchanges;
"Tea Partiers celebrate such reports as a sign that health care reform is toast. Better-informed conservatives understand that even if states don’t create exchanges, the federal government will come in and do it for them. The law is very clear on this point."
If you're the governor of any State but ND, WI or AK you probably have a budget deficit, one that is getting worse, not better. You can spend tens of millions up front, or more, to create an exchange that will then have to be staffed and maintained at the cost of tens of millions of tax dollars. Or you can do nothing and someone will do it for free....that second option doesn't sound so bad.
The real question is why is government spending even a penny on this. There have been numerous exchanges done in the past by private industry (Cal Choice for example). These have been paid for by private capital and maintained by private capital. Private industry also has a much better track record - see my post from a few days ago - with getting such programs to actually work.
There is no shortage of private companies that would be more then willing to create these at no cost to the taxpayer, and do a much better job at it. NAHU would be a great sponsor of exchanges, for example. It is also important that we have competition amongst multiple exchanges, something that tends not to happen when competing against the government.
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