The Right Prescription

Waiver Goodbye to Obama

No matter what he's selling, states know there's no way out of the fiscal trainwreck that is Obamacare.  

By 3.2.11

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The strings attached to President Barack Obama's Monday offer to allow state waivers out of certain Obamacare requirements are designed to earn Obama political credit for appearing flexible while restraining states from actually implementing any programs that might avoid the fiscal train wreck imposed on them by Obamacare

President Barack Obama suggested that he is willing to give states a way out of some of Obamacare's most onerous requirements in 2014, three years earlier than allowed under an existing provision in the law. But much like the Obama administration's refusal to move for expedited Supreme Court review of his signature "achievement," the president's offer to the National Governor's Association, "If you have a better way of doing it, help yourself," is a ploy to gain time for his federal takeover of the health insurance industry to become so ingrained within the federal government's power that it becomes all but impossible to eliminate.

Obama's "offer" is a poisoned bait which Republicans must not even nibble on.

While a well-intentioned governor focused on keeping Obamacare's expansion of Medicaid from bankrupting his state might be inclined to request a waiver, there are two key reasons he (or she) should avoid that temptation:

First, it will increase rather than decrease the chances that we remain forever saddled with massive federal involvement in health insurance. Second, the availability of these statewide waivers is a mirage.

A waiver allowing a state to implement its own plan would require at least the following of the plan:

• Cover as many people with health insurance as Obamacare.

• Insurance coverage at least as "comprehensive" as under Obamacare.

• Insurance just as "affordable" as under Obamacare.

• No increase in the federal budget deficit.

Unfortunately, while any one of these provisions might be theoretically achievable by a state, doing all of them will prove impossible, at least without bankrupting that state. More importantly, since the impacts will have to be estimated in advance rather than measured retrospectively, analysis of and decisions about state plans will be every bit as politicized and fudged as the numbers bandied about regarding Obamacare itself.

For example, the Obama administration claims that the Patient Protection and Affordable Care Act (PPACA), the official name of Obamacare, will cover 32 million currently uninsured Americans. While some of that would certainly happen because of the plan's massive increase in Medicaid, the estimate also includes people whom the administration believes – or at least claims to believe – will buy insurance because Big Nanny tells them to. However, the penalty for not buying insurance is so much lower than the cost of insurance that the plan is likely to cover far fewer people than claimed.

If a future administration's Secretary of Health and Human Services is as blind to reality and as subservient to the political wishes of her boss as Kathleen Sebelius is -- and what political appointee won't be? -- the federal government will simply estimate the state's plan to cover fewer people than Obamacare does and deny the waiver -- especially if the requesting state is "red" rather than "blue."

The impact on the federal deficit will be even easier to game. After all, any administration that could with a straight face claim that Obamacare will reduce the federal deficit could claim that the moon is made of green cheese -- or that a state's plan is worse for the federal budget than PPACA is. And any Democrat administration will do just that if a state's plan poses a perceived threat to the federal government's involvement in health insurance. Obamacare is, after all, more about power and vote-buying than about a quality health care system for our nation.

PPACA's wishful thinking about "affordable" and "comprehensive" insurance is based on massive government subsidies and the cynically rosy assumptions typical of the Obama administration. (Who can forget that if we passed the "stimulus," unemployment would stay below 8%?) No state can afford similar subsidies which will be needed to provide insurance covering every ailment under the sun, every pre-existing condition, and almost every person in the state. In other words, no state will be able to meet the waiver provisions while also keeping health insurance as "affordable" as PPACA because states can't redistribute income on the scale that the federal government does to mask the true price increases.

Therefore, any state plan designed to meet the coverage requirements will inevitably rely on federal subsidies. Health care bureaucrats in HHS and in the Center for Medicare and Medicaid Services (CMS) will then create their newest Orwellian calculation proving that the state's plan will increase the federal budget deficit and the waiver will be denied.

Even in the imaginary situation where a workable state plan could be devised, an objective review of which would show it to meet all the waiver requirements, a Democrat analysis will use wildly different assumptions to reach a different conclusion. Remember, this is the party that says the "stimulus" has "created or saved" three million jobs and wonders what the definition of "is" is.

The provisions of the waiver plan -- a plan originally introduced by Senators Ron Wyden (D-OR) and Scott Brown (R-MA) -- are the health care equivalent of whack-a-mole. Every time a state tries to meet one of the requirements, they'll find the federal government -- at least if a Democrat is in the White House -- popping up their pointy little bureaucrat heads and saying "Sorry, you don't meet this other requirement."

As Senator Orrin Hatch (R-UT) said in an interview on PBS, "Don't think that those waivers mean anything; they really don't… The reason they're not going to work is that they pound all this stuff on top of the states run by nothing else but the almighty federal government. And I know what's going to happen: If President Obama is re-elected, within a couple of years he's going to throw his hands in the air and say 'this isn't working, we must go to a single payer system,' in other words… socialized medicine." (For those who still have any doubt as to the leanings of even the best-mannered "mainstream" talking heads, one can hear a muffled chuckle from PBS's Judy Woodruff as Hatch is speaking.)

The left's future rhetorical tactics are already on display with Mrs. Sebelius saying that Senator Hatch's skepticism about the waiver plan is because Hatch "clearly has some objection to covering all Americans…"

So when Barack Obama tells the nation's governors "Go ahead, take that route," it's the political equivalent of "Please, Br'er Republican, don't throw me into that briar patch!" After all, would Obama really support letting whole states opt out of his dream of socialized health insurance? Republicans will be making a fatal political and fiscal error by even dipping their toes into the poisoned well of Obama's faux-offer of state waivers from Obamacare.

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About the Author
Ross Kaminsky is a self-employed trader and investor and is a senior fellow of the Heartland Institute. He is the host of The Ross Kaminsky Show on Denver's NewsRadio 850 KOA on Saturday mornings from 6 AM to 9 AM. You can reach Ross by e-mail at rossputin(at)rossputin(dot)com.