The States Can Still Kill Obamacare

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The American Spectator:

The States Can Still Kill Obamacare

 

By David Catron on 7.9.12 @ 6:11AM

By taking aim at its insurance exchanges, the law's Achilles' heel, they can do it in.

Now that conservatives and libertarians are beginning to recover from the injuries they sustained by banging their heads against walls, desks, and other hard objects on June 28, perhaps it's a good time to introduce a ray of hope that might have seemed absurdly Pollyannaish during the dark hours immediately following the Supreme Court's surreal Obamacare ruling. Although the voters can put an end to the madness on November 6, the states don't need to wait until Election Day to take aim at a point of vulnerability that remains in place despite the Court's latest caprice. They can refuse to implement the law's insurance exchanges.

The exchanges didn't receive the attention their importance merits while the press, public, and political establishment remained intently focused on Obamacare's individual mandate and the possibility that it might be ruled unconstitutional. The law calls for the states to set up these new bureaucracies, whose ostensible purpose will be to provide "marketplaces" in which people with no employer-based health insurance can shop for coverage at competitive rates. Now that the Court has upheld the individual mandate, these insurance exchanges constitute the key to the success or failure of the law. They are also its Achilles' heel.

How's that? Well, as the Cato Institute's Michael Cannon succinctly puts it, "Without these bureaucracies, Obamacare cannot work." And, oddly enough, the law doesn't actually require states to set up these "marketplaces." Moreover, there is no rational incentive for them to do so. If a state sets up an exchange, it then must pay for it, which won't be cheap. Cannon writes, "States that opt to create an exchange can expect to pay anywhere from $10 million to $100 million per year to run it." This is a burden that the states, most of which are already in deep financial trouble, are not likely to embrace with enthusiasm.

The federal government can set up its own exchanges, in theory, but Obamacare stipulates that Washington would then be required to pick up the tab as well. And, as Cannon goes