The States Can Still Kill Obamacare

Now that conservatives and libertarians are beginning to recover from the injuries they sustained by banging their heads against walls, desks, and other hard objects on June 28, perhaps it's a good time to introduce a ray of hope that might have seemed absurdly Pollyannaish during the dark hours immediately following the Supreme Court's surreal Obamacare ruling. Although the voters can put an end to the madness on November 6, the states don't need to wait until Election Day to take aim at a point of vulnerability that remains in place despite the Court's latest caprice. They can refuse to implement the law's insurance exchanges.

The exchanges didn't receive the attention their importance merits while the press, public, and political establishment remained intently focused on Obamacare's individual mandate and the possibility that it might be ruled unconstitutional. The law calls for the states to set up these new bureaucracies, whose ostensible purpose will be to provide "marketplaces" in which people with no employer-based health insurance can shop for coverage at competitive rates. Now that the Court has upheld the individual mandate, these insurance exchanges constitute the key to the success or failure of the law. They are also its Achilles' heel.

....Michael Cannon succinctly...., "Without these bureaucracies, Obamacare cannot work." And, oddly enough, the law doesn't actually require states to set up these "marketplaces." Moreover, there is no rational incentive for them to do so. If a state sets up an exchange, it then must pay for it, which won't be cheap. Cannon writes, "States that opt to create an exchange can expect to pay anywhere from $10 million to $100 million per year to run it." This is a burden that the states, most of which are already in deep financial trouble, are not likely to embrace with enthusiasm....

Cato Institute’s Michael Cannon piece:

“Obamacare had a bad couple of days before the Supreme Court — so bad that President Obama made some ill-considered comments about the Court from which he still hasn’t totally backpedaled. Though the oral arguments over the individual mandate and severability were encouraging, we cannot count on the Supremes to kill Obamacare. Opponents must keep fighting it on all fronts.

The most important front right now is to ensure that states do not create the health-insurance exchanges Obamacare needs in order to operate. Refusing to create exchanges is the most powerful thing states can do to take Obamacare down. Think of it as an insurance policy in case the Supreme Court whiffs.

Exchanges are the new government bureaucracies through which millions of Americans will be compelled to purchase Obamacare’s overpriced and overregulated health insurance. Through these bureaucracies, insurance companies will receive hundreds of billions of dollars in taxpayer subsidies. Without these bureaucracies, Obamacare cannot work.

Obamacare does not and cannot mandate that states create exchanges.

Here are just a few reasons why states should refuse to create them.”........

http://www.cato.org/publications/commentary/no-obamacare-exchanges?print

Interesting article to be sure - but I'm still not quite sure of an important detail which seems confused in the article.

In one place the article says that the 0bamacare law does not require States to set up exchanges; "And, oddly enough, the law doesn't actually require states to set up these "marketplaces."

In another place it seems to contradict itself; The letter goes on to specifically implore the governors "to oppose any creation of a state health care exchange mandated under the President's discredited health care law."

So this is obviously the crux - are States required to set up exchanges or not?

Anyone.... Buehler?

RE :”The exchanges didn't receive the attention their importance merits while the press, public, and political establishment remained intently focused on Obamacare’s individual mandate and the possibility that it might be ruled unconstitutional. The law calls for the states to set up these new bureaucracies, whose ostensible purpose will be to provide “marketplaces” in which people with no employer-based health insurance can shop for coverage at competitive rates. Now that the Court has upheld the individual mandate, these insurance exchanges constitute the key to the success or failure of the law. They are also its Achilles’ heel.
How's that? Well, as the Cato Institute’s Michael Cannon succinctly puts it, “Without these bureaucracies, Obamacare cannot work.” And, oddly enough, the law doesn't actually require states to set up these “marketplaces.” Moreover, there is no rational incentive for them to do so. If a state sets up an exchange, it then must pay for it, which won't be cheap. Cannon writes, “States that opt to create an exchange can expect to pay anywhere from $10 million to $100 million per year to run it.” This is a burden that the states, most of which are already in deep financial trouble, are not likely to embrace with enthusiasm.
The federal government can set up its own exchanges, in theory, but Obamacare stipulates that Washington would then be required to pick up the tab as well. And, as Cannon goes on to point out, “The Obama administration has admitted it doesn't have the money — and good luck getting any such funding through the GOP-controlled House.” And it gets worse. If the federal government is forced to set up an exchange, it faces yet another huge problem. As Sally Pipes and Hal Scherz write, “The text of the law stipulates that only state-based exchanges — not federally run ones — may distribute credits and subsidies.”
Thus, if a state refuses to set up an exchange, the feds have no real ability to do so either. The states have an opportunity, therefore, to shoot a poison arrow directly into Obamacare’s Achilles’ heel. “
The letter, whose signatories include Senators DeMint, Lee, Coburn, Graham, Vitter, Paul, Cornyn, Sessions, Rubio, Toomey and Shelby, points out a number of facts that are apparently not well understood by state politicians, including the effect the exchanges will have on their business constituents. “Resisting the implementation of exchanges is good for hiring and investment. The law's employer mandate assesses penalties — up to $3,000 per employee — only to businesses who don't satisfy federally-approved health insurance standards and whose employees receive ‘premium assistance’ through the exchanges.”
In other words, a state that declines to set up an exchange will protect the businesses of that state from avoidable and job-killing penalties. This reality has apparently begun to sink in. There has been a noticeable decline in enthusiasm for exchanges among states that had begun work on them shortly after Obamacare passed. “

This is a pretty good sounding scenareo if accurate. The states that do set-up the exchanges must raise taxes and those individuals that use them will have their employer fined for not providing the insurance to them themselves. If the state doesnt setup the exchanges there is no fine to employers.

Here in Maryland our Dem governor (O Malley) has already prepared with waves of tax increase after tax increase on us, the latest an income tax increase for those making over 100K/150K for singles/couples. That is about 80% of working adults living in my county. The remaining are on government assistance.

Ohio passed a Constitutional Amendment but Dewine says ruling trumps Ohio law. But I haven’t seen any communication detailing how the SCOTUS ruling affects state nullification.

http://www.legislature.state.oh.us/res.cfm?ID=129_SJR_1

DeWine: Decision trumps Ohio law

http://www.toledoblade.com/Politics/2012/06/29/DeWine-Decision-trumps-Ohio-law.html

http://www.freerepublic.com/focus/f-news/2901006/posts

But the ruling said States do not need to create the exchanges. And they also can’t be denied the Medicare/caid funds from the Fed govt.

Texas Rejects Expansion of Medicaid

Shocking no one, Perry said in a release this morning that no way, no how would he expand Medicaid.

“If anyone was in doubt, we in Texas have no intention to implement so-called state exchanges or to expand Medicaid under Obamacare,” says the governor. “I will not be party to socializing healthcare and bankrupting my state in direct contradiction to our Constitution and our founding principles of limited government.”

He dispatched a missive to U.S. Health and Human Services Secretary Kathleen Sebelius underscoring that point. As in:

In the ObamaCare plan, the federal government sought to force the states to expand their Medicaid programs by — in the words of the Supreme Court — putting a gun to their heads. Now that the “gun to the head” has been removed, please relay this message to the President: I oppose both the expansion of Medicaid as provided in the Patient Protection and Affordable Care Act and the creation of a so-called “state” insurance exchange, because both represent brazen intrusions into the sovereignty of our state.

http://trailblazersblog.dallasnews.com/2012/07/gov-perry-tells-sebelius-to-relay-this-message-to-the-president-texas-rejects-expansion-of-medicaid.html/

Bump!

http://www.washingtontimes.com/blog/inside-politics/2012/jul/9/rick-perry-texas-wont-expand-medicaid/

...............””I will not be party to socializing health care and bankrupting my state in direct contradiction to our Constitution and our founding principles of limited government,” Mr. Perry said.

He joins more than half-dozen GOP governors who have already said they won’t increase the size of their Medicaid programs to cover Americans up to 133 percent of the poverty level, after the Supreme Court upheld most of the law last month but said states could opt out of the Medicaid expansion.

“I stand proudly with the growing chorus of governors who reject the Obamacare power grab,” Mr. Perry said. “Neither a ‘state’ exchange nor the expansion of Medicaid under this program would result in better ‘patient protection’ or in more ‘affordable care.’ They would only make Texas a mere appendage of the federal government when it comes to health care.””..........

http://www.washingtonpost.com/national/health-science/gov-perry-tells-feds-texas-wont-expand-medicaid-set-up-online-service-to-shop-for-insurance/2012/07/09/gJQAwvmTYW_story_1.html

excerpt:

“Texas Medical Association survey given to The Associated Press over the weekend found that the number of Texas doctors willing to accept government-funded health insurance plans for the poor and the elderly has dropped dramatically amid complaints about low pay and red tape.

Only 31 percent of Texas doctors said they were accepting new patients who rely on Medicaid. In 2010, the last time the survey was done, 42 percent of doctors were accepting new Medicaid patients. In 2000, that number was 67 percent.”

In a Fox News interview earlier today, Perry compared expanding Medicaid to adding passengers to the Titanic .
Good Analogy !

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