Even though Speaker John Boehner (R-Ohio) has stated that Obamacare is now “law of the land,” implementation is far from certain. A key glitch in the legislation was that the 2,700 page document did not require states to set up their own insurance exchange.
It was just assumed that states would be interested in participating. Originally, states had until November 16, 2012 to declare whether or not they intended to set up their own state exchange or a federal facilitated exchange. So far, 40% of states have declined to set up a state-run insurance exchange, so the Dpt. of Health and Human Services has extended the deadline until Dec. 14 to try and “encourage” states to participate. This creates huge, unanticipated obstacles to the new law.
Running the exchanges is estimated to cost between $10 and $100 million per state each year. States choosing to participate will likely be required to raise taxes and/or divert funds currently allocated to other programs. As expressed by Republican Texas Governor Rick Perry, the federal government is asking states to "[be] on the financial hook for an unknown amount of money to operate a system under rules that have not even been written.” Emphasis is my own. So far, there are 17,000 plus pages of Obamacare regulations and they are reportedly only one third of the way through writing the legislation.
Iowa Republican Governor Terry Brandstad has submitted 50 questions to HHS that he feels need answering before deciding between a state or federal exchange. Michael Bousselot, an advisor to Branstad on health care issues, "likened it to trying to buy a car without knowing the key features or the price of the car." Bousselot continued, " If we’re going to set up an exchange, we need to know what the requirements are, what the costs will be.”
One lawsuit has been filed by the state of Oklahoma in part stating, “Oklahoma has not established or elected to establish an Exchange, and does not expect to do so. As a result, under the plain terms of the Act, employers in Oklahoma should not be subject to the Employer Mandate because of a determination that an Oklahoma resident employed by the employer in Oklahoma is entitled to advance payment of a premium tax credit because of enrolling for coverage through an Exchange established by HHS to operate in Oklahoma”
While Arkansas is opposing the specific rule that employers are subject to the mandate, more suits could follow opposing the broader issue of federalism and government overstepping the boundaries of states’ rights.
These insurance exchanges are intended to match uninsured individuals with plans that meet their needs and reflect eligibility for government help. After gathering massive amounts of personal medical and financial information —personally, I’m not interested in providing the government with this information — website portals provide online enrollment into the approved policies. The exchanges then distribute billions of taxpayer money to private insurance companies in the form of subsidies. You don’t get the money. Private insurance companies receive it “on your behalf.”
Obamacare vastly increases Medicaid eligiblity and establishes new premium subsidies while bringing an estimated 30 million more people into the federal government’s entitlement system. Currently, states have different insurance markets and different Medicaid eligibility requirements. HHS will be assigned the responsibility of creating exchanges that fit within each states’ system — a rather daunting and expensive task — or will have to impose a one-size-fits-all package.
Another problem with the viability of Obamacare is that the law failed to specify a set funding mechanism for a federally established state exchange. HHS will have to find the money in its budget or request additional funds through the regular appropriations process. To avoid the implementation of this massive entitlement program with a government that is already overspending its way into oblivion, the solution is: do nothing. Governors should not assist setting up the exchange. Congress should not allocate additional monies to setting up the exchanges.
And then we shall see what happens next.