For several years, opposition to President Obama’s health care law focused on its mandate that forces individuals to purchase government-approved insurance. By upholding the mandate as a constitutional exercise of Congress’s taxing power in June, the U.S. Supreme Court maintained the provision that helped hold the law together. But if the mandate is the cement, the law’s expansion of Medicaid and establishment of subsidized health insurance exchanges is the house itself. It’s these two provisions that will be responsible for$1.7 trillion of spending over the next decade, according to the Congressional Budget Office. Together, they are expected to provide insurance to 30 million Americans and create the infrastructure that liberals hope to use to transition the nation, over time, into a fully government-run, or single payer, health care system. With the election over and Obama reelected, repealing the law is not going to happen over the next four years. So 30 Republican governors will have to make a decision about whether they want to help the federal government implement Obamacare, or keep the onus on the Obama administration.
One of the silver linings of the Supreme Court decision is that it gave states the ability to opt out of the Medicaid expansion. Medicaid is one of the programs that is crushing state budgets and if implemented as intended, Obamacare will add 18 million beneficiaries to the program’s rolls. Though the federal government lures states with a honey pot in the short term – covering all of the expansion through 2016, by 2020 the states will be asked to kick in 10 percent of the cost, amounting to billions of dollars of spending imposed on states nationwide each year. It would be to the long-term benefit of governors to opt of the expansion.
Separately, the health care law was designed to coerce governors into embracing exchanges on which individuals will be provided with federal subsidies to purchase insurance. If a state doesn’t establish its own exchange, the law specifies that the federal government will step in and set one up for them. Given that Republicans typically favor more state and local control, there’s a clear temptation for them to cave in, assuming that the lesser of two evils by implementing the exchanges themselves. But they should resist that temptation.
Though the law creates the veneer of providing states with flexibility on the exchanges, the reality is that all of the major decisions – from the broad structure of the exchanges to the details of what kind of health care plans will be offered in the exchanges and how they will be marketed – will be made from Washington. A careful reading of the law finds that all of the sections about state “flexibility” are filled with caveats that render them useless in practice, because Secretary of Health and Human Services Kathleen Sebelius will be running the show. For instance, Obamacare specifies that, “The Secretary shall, by regulation, establish criteria for the certification of health plans as qualified health plans.” And later orders that “An Exchange may not make available any health plan that is not a qualified health plan.” In other words, Sebelius will get to decide what type of health care plans can be offered on these state exchanges.