Federalism and the ACA: How States Can Control Health Care Destiny

David Harsanyi explains just how expensive the “Affordable Care Act” will be:

And even after all the taxes and mandates, the CBO [Congressional Budget Office] estimates that by 2021, around 26 million Americans still won’t have health insurance. What will it cost to provide universal coverage using the Obamacare model be? We don’t know. But a person should be highly skeptical about the numbers we’re hearing.
In a study released a few months ago, Chuck Blahous, a Medicare Board of Trustee member named by President Obama, reported that price tag for Obamacare was around $1.15 trillion. It doesn’t lower the deficit as promised but increases it by nearly $530 billion by 2021.
A few years ago, the Senate Joint Economic Committee released a study that looked at initial estimates of programs and their costs in dollars at that time. In 1967, the House Ways and Means Committee predicted that the new Medicare program would cost $12 billion in 1990. It was $110 billion. In 1987, Congress estimated that Medicaid’s hospital subsidies were estimated to cost less than $1 billion in 1992. It was $17 billion.
That’s just two of countless examples.
So even if Obamacare’s coercive individual mandate weren’t technically a tax, it is effectively one of the largest taxes we’ve seen in a long time. And, all signs say, it’s going to get a lot bigger. In the end, someone’s got to pay.

There is a way around this for states, as Jeffrey Singer of the CATO Institute explains. According to Singer, states refusing to expand their Medicaid programs will “place a huge obstacle in the path of implementing” the ACA. This is because this will shift coverage for those individuals into the Health Care exchanges that are mandated by the ACA but states aren’t obligated to create on their own. And they shouldn’t.

The state reaps no advantage from creating an exchange. This is because the state must carry out all federal directives in operating and implementing the exchange, and has no autonomy in the matter. In effect, all it does is make the state act as the proxy — the executive secretary, if you will — for the federal government in operating its exchange.

Therefore, states that opt-out of Medicaid expansion should also elect to not create their own Health Care Exchange, thereby shifting the burden of Exchange creation back onto the federal government.

According to the Affordable Care Act, the federal government will set up a health insurance exchange in any state that chooses not to create its own exchange. It is through these exchanges that people will obtain their government-approved health insurance….according to explicit wording in the Affordable Care Act, if the states let the federal government create the exchanges, then residents of those states will not be able to receive federal subsidies to help them purchase the super-expensive, government-designed, government-mandated health insurance. Without those subsidies, few people would want to purchase these expensive policies.


[If the] federal government creates the exchanges, small businesses are exempt from the onerous employer mandates. This rescues small businesses from the huge financial burden Obamacare places upon them. It will enable them to expand and add jobs without fear of financial insolvency from health insurance mandates.
In short, if the states don’t create their own exchanges, Obamacare won’t work.
So the cloud of the Supreme Court’s Obamacare decision indeed comes with a silver lining. It leaves the states holding all the cards. The future of Obamacare is in their hands.

Justin has also explained how the Affordable Care Act will lead to less affordable health care for Rhode Islanders and has expanded on it with a policy brief (PDF) published by the Rhode Island Center for Freedom and Prosperity, which also recommends that Rhode Island should pass a Health Care Freedom Act:

1) Repeal the governor’s executive order creating PPACA Health Insurance Exchanges.
2) Apply for a State Innovation Waiver to free RI from certain provisions of PPACA, including exchanges.
3) Enact a Health Care Freedom Act that would:
a) Open up competition by allowing interstate sales to permit Rhode Islanders
to purchase health insurance plans from approved providers in other states.
b) Allow an “opt out” provision from the state’s currently burdensome level of
health insurance mandates and require insurers to openly display the original
mandates not included.
4) Pass an amendment to the state constitution to prohibit the federal government from ever requiring Rhode Island residents to buy health insurance.
5) Pass a resolution calling for amendment of the federal Constitution to invalidate PPACA.

Similar actions are being taken in other states. Unfortunately, given our current governor and the political makeup of our state, there is is a snowball’s chance in July of Rhode Island opting out. In fact, we’re rushing to be the first in.

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