Boy does Gov. Mitch Daniels have an ultimatum for President Obama: Wave off the health reform law or I’ll do nothing to help while it wreaks havoc on Hoosier citizens.

That’s the message Daniels sent in an op-ed piece this week and a letter addressed to Kathleen Sebelius, Obama’s secretary of health and human services. Daniels was one of 21 governors to sign the letter, which said their states will not set up the health insurance exchanges called for in the law unless the feds undo most of the rules that will apply to those exchanges.

If a state fails to act, the law calls for the federal government to operate an exchange for that state’s citizens.

“Washington's attempt to set up eligibility and exchange bureacracies in all these places would invite a first-rate operational catastrophe. If there’s to be a train wreck, we governors would rather be spectators than conductors,” Daniels wrote in the Wall Street Journal on Monday, calling the health care law “a massive mistake” that would cost Indiana billions.

The governors' letter also objects to Congress requiring states to expand their Medicaid programs to accept people with incomes up to 133 percent of the federal poverty limit. Indiana currently has similar or higher limits for mothers and children, but for childless adults, only those with incomes below 26 percent of the poverty limit can receive Medicaid benefits.

In the letter to Sebelius, the rhetoric was a little less pointed than Daniels’ column. The governors—all of whom are Republicans—wrote, “In addition to its constitutional infringements, we believe the system proposed by the [health reform law] is seriously flawed, favors dependency over personal responsibility, and will ultimately destroy the private insurance market. Because of this, we do not wish to be the federal government’s agents in its present form.”

Specifically, Daniels and his counterparts want Sebelius to make these changes:

1.    Allow states complete flexibility to decide which insurers can offer products in the state-based exchanges.
2.    Waive all the minimum-benefit mandates on insurance policies that are allowed to be sold through the exchanges.
3.    Waive provisions in the law—mainly the roll-back of some tax incentives—that the governors say discriminate against health savings accounts.
4.    Allow states to require non-disabled Medicaid beneficiaries to buy insurance through the exchanges.
5.    Fully reimburse states for the administrative costs of the exchanges—as determined by an independent auditor.
6.    Commission an independent projection of the number of people likely to seek insurance through the exchanges.