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A State Revolt Against ObamaCare Emerges

Investor’s Business Daily

July 10, 2012

A State Revolt Against ObamaCare Emerges

Health Reform: After the Supreme Court’s ruling, President Obama declared ObamaCare “here to stay.” But a revolt is brewing among states that, if it continues, could cause key pieces of the misbegotten law to collapse.

On Monday, Texas Gov. Rick Perry was the latest to refuse ObamaCare’s massive intrusion into state affairs. He won’t be expanding Medicaid — a key part of ObamaCare’s attempt to boost coverage — or setting up a state-run insurance “exchange” to administer its massive regulations and subsidies.

As Perry told Health and Human Services Secretary Kathleen Sebelius, ObamaCare would make Texas “a mere appendage of the federal government when it comes to health care.”

Perry, along with governors in 14 other states — which represent almost a third of the entire U.S. population — have more or less made it clear that they will say “no thanks” to ObamaCare’s vast expansion of Medicaid.

Since the ultimate cost of this expansion will be huge — Texas alone would get hit with a bill of $6 billion between 2014 and 2019 — states are right to refuse the offer.

Under the law, most of the uninsured would get coverage through an expanded Medicaid, which Obama tried to force down states’ throats by threatening to take all their federal Medicaid funds away if they didn’t play along.

The one saving grace of the Supreme Court’s disastrous ObamaCare ruling was that it struck down this federal power grab, giving states the option of refusing to comply with the Medicaid expansion, without risking any existing federal Medicaid dollars.

Even liberal Maine made it clear that it has no interest in ObamaCare’s overgrown Medicaid plan. Just as the ink was drying on the court’s ruling, the state moved to cut more than 20,000 people from its Medicaid rolls immediately.

Meanwhile, more and more states are refusing to create ObamaCare’s insurance “exchanges.” In fact, just 14 states have even passed laws authorizing the creation of them.

What more states are realizing is that setting up an exchange is a fool’s errand.

Under the law, if a state doesn’t set up an insurance exchange, the federal government will do it for them. That alone gives states an incentive not to bother, since they can pass all the costs and hassles of running the exchange to the feds.

Plus, by handing the job of creating the exchanges to the federal government, states can actually protect state-based companies from the ObamaCare mandate that they provide insurance to their employees or pay a penalty.

That’s because, under the law, the insurance subsidies can only be run through state-administered exchanges, not federally operated ones. And the penalty only applies if employees can get subsidized coverage through an exchange.

So, no state-run exchange, no effective business mandate.

“Resisting the implementation of exchanges is good for hiring and investment,” explained a letter sent to the nation’s governors signed by 73 lawmakers, and “will help lower the costs of doing business in your state, relative to other states that keep these financially draining exchanges in place.”

This loophole hasn’t been lost on the Obama administration, which has been writing rules that pretend it doesn’t exist. But whatever Obama might think, he’s not at liberty to rewrite the law on his own.

None of this mattered much when ObamaCare’s constitutionality was in dispute. But now that states face the grim reality of its massive new costs, more are likely to refuse to play the sap. And if enough refuse, two key pieces of the law could end up in ruins.

Even that wouldn’t obviate the need for Congress to overturn the entire law. There are simply too many other awful provisions that must be stopped.

But a state revolt does provide increased hope that, one way or another, ObamaCare’s days are numbered.