Republicans will hold 30 governorships starting in January, and at last week's meeting of the Republican Governors Association they made it clear that they remain highly critical of the health law. Some Republican governors—including incoming RGA Chairman Bobby Jindal of Louisiana, Ohio's John Kasich, Wisconsin's Scott Walker and Maine's Paul LePage—have already said they won't do the federal government's bidding. Several Democratic governors, including Missouri's Jay Nixon and West Virginia's Earl Ray Tomblin, have also expressed serious concerns.
States still have two key choices to make that together will put them in the driver's seat: whether to create state health-insurance exchanges, and whether to expand Medicaid. They should say "no" to both.
At its core, ObamaCare is a massive entitlement expansion. Between vastly increased Medicaid eligibility and new premium subsidies, it is expected to bring 30 million more people onto the federal government's entitlement rolls. The law anticipates that the states will take on the burden of implementing the expansions, but states can opt out of both.
The exchanges would create unsustainable pressures on each state's insurance market, treating similarly situated people differently by providing far greater subsidies for those in the exchanges than those in employer plans—yielding perverse incentives that distort consumer and employer decisions and increase costs.
States would endure all this simply to become functionaries of the federal government. The idea that creating state exchanges would give states control over their insurance markets is a fantasy. The states would be enforcing a federal law and federal regulations, with very little room for independent judgment.
[MY NOTE ON THAT: The Democrats sure hate the No Child Left Behind Act for the Exact. Same. Reason. So why is it no good for that but FANTASTIC for this??Governors know this.
By declining to build exchanges, the states would pass the burden and costs of the exchanges to the administration that sought this law. And it is far from clear that the administration could operate the exchanges on its own.
Congress didn't allocate money for administering federal exchanges, and the law as written seems to prohibit federally run exchanges from providing subsidies to individuals...
Thus states that refuse to create their own exchanges would effectively be repealing a large part of the law—sparing their citizens from the job-killing employer mandate and from assaults on their religious liberty. In some cases people would even be spared from the individual mandate to buy coverage, since in the absence of exchange subsidies more families would qualify for exemptions from the mandate.
The Medicaid expansion, meanwhile, would throw millions of additional Americans into a system that is already bankrupting state governments and increasing costs in the private-insurance market. Medicaid's payments for services are so low that many existing beneficiaries have trouble finding physicians and other health-care providers who will accept them as patients. Enrolling more people without reform will push the system to the point of collapse.
Instead of following the Obama administration's plan, states should seek real reform. For example, they should demand that Washington transform the federal portion of Medicaid for non-disabled and non-elderly beneficiaries into a uniform block grant, with state discretion over eligibility and benefits. The goal should be to turn Medicaid into a premium-assistance program rather than government-run insurance. Medicaid could then be used to help people enroll in mainstream insurance plans. This is the way to help the low-income uninsured get the same kind of coverage as other Americans.
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Saturday, December 01, 2012
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