President Obama has won reelection, and his
administration has asked state officials to decide by Friday, November
16, whether their state will create one of Obamacare's health-insurance
"exchanges." States also have to decide whether to implement the law's
massive expansion of Medicaid. The correct answer to both questions
remains a resounding no.
State-created exchanges mean higher taxes, fewer jobs, and less
protection of religious freedom. States are better off defaulting to a
federal exchange. The Medicaid expansion is likewise too costly and
risky a proposition. Republican Governors Association chairman Bob
McDonnell (R.,Va.) agrees, and has
announced that Virginia will implement neither provision.
There are many arguments against creating exchanges.
First, states are under no obligation to create one.
Second, operating an Obamacare exchange would be illegal in 14
states. Alabama, Arizona, Georgia, Idaho, Indiana, Kansas, Louisiana,
Missouri, Montana, Ohio, Oklahoma, Tennessee, Utah, and Virginia have
enacted either statutes or constitutional amendments (or both)
forbidding state employees to participate in an essential exchange
function: implementing Obamacare's individual and employer mandates.
Third, each exchange would cost its state an estimated $10 million to $100 million per year, necessitating tax increases.
Fourth, the November 16 deadline is no more real than the "deadlines"
for implementing REAL ID, which have been pushed back repeatedly since
2008.
Fifth, states can always create an exchange later if they choose.
Sixth, a state-created exchange is not a state-
controlled exchange. All exchanges will be controlled by Washington.
Seventh, Congress authorized no funds for federal "fallback"
exchanges. So Washington may not be able to impose Exchanges on states
at all.
Eighth, the Obama administration has yet to provide crucial
information that states need before they can make an informed decision.
Ninth, creating an exchange sets state officials up to take the blame
when Obamacare increases insurance premiums and denies care to the
sick. State officials won't want their names on this disastrous mess.
Tenth, creating an exchange would be assisting in the creation of a "
public option" that would drive domestic health-insurance carriers out of business through unfair competition.
Eleventh, Obamacare remains unpopular. The latest Kaiser Family Foundation
poll found that only 38 percent of the public supports it.
Twelfth, defaulting to a federal exchange exempts a state's employers
from the employer mandate — a tax of $2,000 per worker per year (the
tax applies to companies with more than 59 employees, but for such
companies that tax applies after the 30th employee, not the 59th). If
all states did so, that would exempt 18 million Americans from the
individual mandate's tax of $2,085 per family of four. Avoiding those
taxes improves a state's prospects for job creation, and protects the
conscience rights of employers and individuals whom the Obama
administration is forcing to purchase contraceptives coverage.
Finally, rejecting an exchange reduces the federal deficit. Obamacare
offers its deficit-financed subsidies to private health insurers only
through
state-created exchanges. If all states declined, federal deficits would fall by roughly $700 billion over ten years.
For similar reasons, states should decline to implement Obamacare's
Medicaid expansion. The Supreme Court gave states that option. All
states should exercise it.
Medicaid is rife with waste and
fraud. It
increases
the cost of private health care and insurance, crowds out private
health insurance and long-term-care insurance, and discourages enrollees
from climbing the economic ladder. There is scant reliable evidence
that Medicaid improves health outcomes, and
no evidence that it is a cost-effective way of doing so.
My colleague Jagadeesh Gokhale estimates that expanding Medicaid will
cost individual states up to $53 billion over the first ten years.
That's before an emboldened President Obama follows through on his
threats to shift more Medicaid costs to states.
Neither the states nor the federal government have the money to
expand Medicaid. If all states politely decline, federal deficits will
shrink by another $900 billion.
Now is not the time to go wobbly. Obamacare is still harmful and
still unpopular. The presidential election was hardly a referendum, as
it pitted the first person to enact Obamacare against the second person
to enact it. Since the election, many state officials are reaffirming
their opposition to both implementing exchanges and expanding Medicaid.
If enough states do so, Congress will have no choice but to reopen
Obamacare. With a GOP-controlled House, opponents will be in a much
stronger position than they were when this harmful law was enacted.
