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.
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. Among those who get this is the Governor of
Florida. That is why, when Rick Scott
announced that his state would not comply with Obamacare’s
Medicaid mandate, he also noted that Florida would not be setting
up any state-run insurance “marketplace”: “Floridians are
interested in jobs and economic growth, a quality education for
their children.… Neither of these major provisions in Obamacare
will achieve those goals.”
Scott isn’t the only governor to balk at moving forward on
state-based exchanges. Scott Walker of Wisconsin, Sam Brownback of
Kansas, and Mary Fallin of Oklahoma have all pushed back as well.
And the momentum seems to be building. In May, Alabama’s governor
Robert Bentley thwarted his legislature when it tried to create an
exchange and Chris Christie vetoed a bill passed by the New Jersey
legislature to set one up. In June, after the Supreme Court handed
down its decision, Louisiana Governor Bobby Jindal also
joined the movement: “Absolutely, we’re not implementing the
exchanges. We’re not implementing Obamacare.”
Meanwhile, conservatives in Congress are ramping up an effort to
enlist more governors in the cause. Seventy-three senators and
representatives have signed a
letter to the National Governors Association urging its members
to stay in the fight against Obamacare: “As members of the U.S.
Congress, we are dedicated to the full repeal of this government
takeover of healthcare and we ask you to join us to oppose its
implementation.” 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.”
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. North
Dakota, New Hampshire, Idaho and South Carolina, to name a few,
have abandoned plans to create these insurance “marketplaces.”
Kaiser Health News
reports that, by the end of June, “only 14 states and the
District of Columbia have so far passed legislation authorizing the
exchanges.”
So, even after the Supreme Court’s incoherent ruling that
Obamacare and its much-reviled mandate are constitutional, there is
still hope that the monster can be brought low. If the states
simply decline to implement the insurance exchanges, the beast will
die. Will Obama and his HHS minions try to avoid this by ignoring
the law and try to funnel credits and subsidies through federally
created exchanges? Yep. The rule of law, as they have repeatedly
demonstrated, means nothing to them. But that’s where the voters
come in. This won’t be a problem if the electorate evicts Obama
from the White House in November.
