In a presidential election year like 2012, it’s easy for national issues to crowd out state and local concerns at the ballot box. But thanks to Obamacare’s costly mandate on states to create health insurance exchanges, fiscal conservatives running for state offices can easily make opposition to more government a central plank in their campaign platform.
According to Cato Institute scholar Michael F. Cannon, outside of the U.S. Supreme Court’s potentially striking down Obamacare’s individual mandate, the most important health policy battle to be waged is state government opposition to creating Obamacare’s state-based health insurance exchanges.
As I’ve written previously these exchanges are a subtle way to coerce states into spending millions of dollars to set-up a government-controlled, taxpayer-subsidized “market” for health insurance. Thereafter, when Obama’s bureaucrats at HHS decide the state version isn’t performing exactly the way they want, Obamacare grants HHS the power to take over any state’s exchange and run it from Washington, D.C. Thus, the bait-and-switch is yet another way for Obamacare to hide its impact on the federal budget deficit by shoving some of its start-up costs onto the states.
Cato’s Cannon outlines a different strategy, with talking points that to me seem ready-made for a state campaigner’s website:
Jobs. Refusing to create an exchange will block Obamacare from imposing a tax on employers whose health benefits do not meet the federal government’s definition of “essential” coverage. That tax can run as high as $3,000 per employee. A state that refuses to create an exchange will spare its employers from that tax, and will therefore enable them to create more jobs.
Religious freedom. In blocking that employer tax, state officials would likewise block Obamacare’s effort to force religious employers to provide coverage for services they find immoral — like contraception, pharmaceutical abortions, and sterilization.
The federal debt. Refusing to create exchanges would also reduce the federal debt, because it would prevent the Obama administration from doling out billions of dollars in subsidies to private insurance companies.
The U.S. Constitution. The Obama administration has indicated that it might try to tax employers and hand out those subsidies anyway — even in states that don’t create an exchange, and even though neither Obamacare nor any other federal law gives it the power to do so. If that happens, the fact that a state has refused to create an exchange would give every large employer in the state — including the state government itself — the ability to go to court to block the administration’s attempt to usurp Congress’s legislative powers.
A lower state tax burden. States that opt to create an exchange can expect to pay anywhere from $10 million to $100 million per year to run it. But if states refuse, Obamacare says the federal government must pay to create one. Why should states pay for something that the federal government is giving away?
Bye-bye, Obamacare. That is, if the feds can create an exchange at all. The Obama administration has admitted it doesn’t have the money — and good luck getting any such funding through the GOP-controlled House. Moreover, without state-run exchanges, the feds can’t subsidize private insurance companies. That by itself could cause Obamacare to collapse.
There is no reason a state should agree to spend millions of dollars laying the groundwork for a federal takeover of health care. Fiscal conservatives running for office this cycle should articulate this argument well and often.