The Continuing Resistance to ObamaCare

With President Obama’s triumph in November, many political observers sounded the death knell for the “full repeal” movement fighting against ObamaCare. Despite lingering controversy and general unpopularity, the president’s victory and a large Democratic majority in the Senate made the law appear safe at last. Is it?

In a sense, it is. Full repeal almost certainly won’t happen while President Obama is in office, and attempts to reform the law will struggle to gain traction as long as progressives keep their hold on the Senate. If the law won’t be repealed before its true implementation in 2014, and if reform is almost as unlikely as repeal, what recourse is left for the law’s opponents?

Well, there’s still the lingering question of implementation. This massive law needs a lot of infrastructure in order to function as designed, but by far the most important element is its network of “health care exchanges.”These “exchanges” are marketed as a conservative, market-based approach to providing the uninsured with health insurance coverage, but that description is far from reality.

In truth, each “exchange” will only feature government-regulated and approved coverage plans. The private insurance companies who offer plans in this supposed “marketplace” will receive generous federal subsidies to reduce the cost of insurance premiums for consumers. Does this sound like a conservative or market-based solution to health care reform? An exchange-in-name-only that features heavy federal regulation and extensive corporate welfare simply isn’t a free market plan.

Those who drafted the law intended for each state to construct its own “exchange.” Their purpose was two-fold: 1.) to create the appearance of state-based control and involvement and 2.) to reduce the burden on the federal Department of Health and Human Services. In reality, the states have very little leeway to tinker with the design or function of the “exchanges.” Additionally, each state that agrees to start its own “exchange” also agrees to take on the costs of maintaining its day-to-day operations, which will cost tens of millions of dollars annually. The law’s designers wanted the labor and expense of building and operating each “exchange” to fall on the states, not the federal government.

The concept of state involvement in these “exchanges” was always a mere facade, but it may have also been a critical mistake by ObamaCare’s creators. These “exchanges” are the bedrock of ObamaCare, and they must be in place for the law to function properly. When the individual mandate goes into effect in 2014, Americans who do not receive insurance through their employer and who do not qualify for a federal program such as Medicare are meant to get it through the “exchanges.”The “exchanges” are also the mechanism by which the federal government intends to disburse the subsidies to make health insurance affordable for the uninsured.

By refusing to set up an “exchange,” a state places the heavy burden of getting one up and running by 2014 on the Department of Health and Human Services. How many states have joined the ObamaCare resistance? Two, three? Maybe four? No, a staggering twenty-six states have refused to set up their own “exchange.” A majority of states have refused to collaborate with the federal government to implement the unpopular law. It is without question a stunning success for the grassroots resistance to ObamaCare.

Here’s a list of states that have decided not to set one up: Alabama, Alaska, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Michigan, Missouri, Montana, Nebraska, New Hampshire, New Jersey, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Wisconsin, and Wyoming. (A 27th state, Utah, set up an exchange that is intentionally non-compliant with federal regulations.)

Interestingly, some policy experts believe that an error made in drafting the actual text of the law may transform this state by state resistance into a mortal blow to ObamaCare. According to a strict reading of the law, the federal government cannot disburse the subsidies in a state that has refused to make one itself. In the absence of these subsidies for the insurance companies, the basic machinery at the heart of ObamaCare falls apart.

Without these massive federal subsidies underlying the state “exchanges,” the individual mandate and the guaranteed issue/community rating mandates on private insurance companies will be intolerable. The uproar caused by the crashing and burning of ObamaCare could force progressives back to the negotiating table on health care reform, providing conservatives with another chance to push for affordable, consumer-driven, patient-centered health care.

The federal bureaucracy has made it clear that they intend to overlook this mistake and to disburse subsidies within the federally-run “exchanges” anyway, but employers can then sue the federal government for violating the text of the law. Once again, the fate of ObamaCare’s most important provisions will end up in the hands of the judiciary. It’s impossible to know how this battle will end, but the fight to resist and to repeal ObamaCare continues on.

Edit: I have updated the text of this article to reflect a correction made by commentator GB.

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About Daniel Anderson

I am a 21 year old Michigan native completing the final year of my undergraduate education at Hillsdale College. I tend to categorize my political philosophy as "constitutional conservatism." I also advocate free-market economics.
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5 Responses to The Continuing Resistance to ObamaCare

  1. Lydia Lozano says:

    I wish you would next address the issue of expanding Medicaid and what a fiscal trap it sets for the States.

  2. GB says:

    I think you’re confusing an argument popularized by Cato, which is that a strict reading of the text of the ACA doesn’t allow for federal subsidies to flow through federal exchanges. I’ve never heard anyone claim the text doesn’t allow for federal exchanges themselves, as it clearly states “If a State is not an electing State [i.e. a state electing to design and operate an exchange] …the Secretary shall (directly or through agreement with a not- for-profit entity) establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.”

    Anyway, it would be interesting to hear a clear articulation of what “leeway to tinker with the design or function of the ‘exchanges'” leaders in these states would like that they don’t currently have.

    • Sorry, I forgot to reply to this. You’re absolutely right, I did misconstrue the Cato argument here. Your reading of it is correct, and I have updated the article to reflect that.. As for your second point, that’s something I plan to address in the future. Thank you for the correction.

  3. Pingback: Your Real Money Costs For Obamacare | Eradica

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