Holtz-Eakin is a former director of the Congressional Budget Office, and he served as the chief domestic policy adviser to John McCain's presidential campaign.
The healthcare law envisions each state setting up its own exchange — a sort of Expedia or Orbitz for health insurance — but authorizes a federally run fallback in states that don't act on their own. The Obama administration has pushed states to control their own exchanges, and policy experts agree a state-based approach is preferable to federal control.
But Republican governors have rejected state-based exchanges, saying they won't play any part in helping to implement a law they oppose.
"This would truly be a Washington takeover of healthcare," Holtz-Eakin wrote of the federal exchange. "And if conservatives allow it to happen, they will be consenting to an unprecedented and potentially irreversible intrusion into states’ economies and healthcare systems. It would give single-payer advocates a foothold across many states."
Operating a state-based exchange gives the states the power to make key decisions about their marketplace, such as whether to negotiate directly with insurance plans or open the market up to any plan that meets certain minimum criteria. States could also decide whether to preserve or eliminate the individual market outside of their exchanges, or require non-exchange plans to meet the same criteria as exchange plans.
Punting those decisions to the federal government is "choosing a slippery slope toward precisely what liberal Democrats want: a federally controlled healthcare system that would be the first step toward European-style, single-payer healthcare," Holtz-Eakin wrote.
He also noted that even some of the healthcare law's most ardent private-sector opponents back state-run exchanges.
"Remember, the concept of exchanges originated among conservative thinkers," Holtz-Eakin wrote. "A consumer-driven marketplace where private companies compete on price, variety, and quality to sell their products is far better than the federal government’s dictating to consumers and undermining their choices."