Are there many ways that a state could shield businesses in their state from an onerous, job killing tax penalty? In most cases - no. But in the case of ObamaCare the answer is a definitive "yes!!!"

ObamaCare seeks to have states set up insurance exchanges or government controlled "markets" whereby federal subsidies are dolled out so that people can buy heavily regulated, government approved health insurance. According to this article from The Wall Street Journal, if a state establishes an exchange, ObamaCare allows the subsidies to be given out (see Section 1311). If a state refuses to set up an exchange, the federal government will do so but ObamaCare does not permit any subsidies for people who access the federal exchanges (see Section 1321). 

So, a state that takes a pass on establishing an exchange (as many states have chosen to do) is effectively telling the feds, "we aren't going to spend state tax dollars to do your dirty work - have at it." But here is where a state that decides to take a pass can really benefit that state's economy. Under ObamaCare, if someone receives an exchange subsidy, their employer is subject to a penalty under ObamaCare but if no employees receive a subsidy employers are not subject to the penalty. Get it? The bottom line is that states can protect job creators from onerous federal taxes if they refuse to create and set up an ObamaCare insurance exchange. That is a significant incentive for states to protect their economy and jobs. The alternative is to create an exchange, letting the penalty kick in, resulting in fewer businesses and fewer jobs which will create a double-whammy for state taxpayers. Taxpayer will have to foot the bill to deal with the further strain on a state's social safety net resulting from higher unemployment and would end up footing the bill to finance a system to hand out federal bennies.  A bad deal all around for states, employers, employees and taxpayers.

Read more about this here.

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• “Put simply, Congress acted without constitutional authority in enacting the Individual Mandate of the PPACA. In so doing, it has damaged Congress’ institutional legitimacy and has triggered severe conflicts between state and federal governments that the Constitution was carefully designed to avert.”
• “Because the Individual Mandate regulates a simple decision or choice not to purchase a particular product, it exceeds the proper scope of the Commerce Clause.”

The amicus brief was signed by:Sen. Mitch McConnell (R-KY), Sen. Orrin Hatch (R-UT), Sen. Lamar Alexander (R-TN), Sen. Kelly Ayotte (R-NH), Sen. John Barrasso (R-WY), Sen. Roy Blunt (R-MO), Sen. John Boozman (R-AR), Sen. Richard Burr (R-NC), Sen. Saxby Chambliss (R-GA), Sen. Daniel Coats (R-IN), Sen. Tom Coburn (R-OK), Sen. Thad Cochran (R-MS), Sen. Susan Collins (R-ME), Sen. Bob Corker (R-TN), Sen. John Cornyn (R-TX), Sen. Mike Crapo (R-ID), Sen. Jim DeMint (R-SC), Sen. Michael Enzi (R-WY), Sen. Chuck Grassley (R-IA), Sen. Dean Heller (R-NV), Sen. John Hoeven (R-ND), Sen. Kay Bailey Hutchison (R-TX), Sen. James Inhofe (R-OK), Sen. Johnny Isakson (R-GA), Sen. Mike Johanns (R-NE), Sen. Ron Johnson (R-WI), Sen. Jon Kyl (R-AZ), Sen. Mike Lee (R-UT), Sen. Richard Lugar (R-IN), Sen. John McCain (R-AZ), Sen. Jerry Moran (R-KS), Sen. Lisa Murkowski (R-AK), Sen. Rand Paul (R-KY), Sen. Rob Portman (R-OH), Sen. James Risch (R-ID), Sen. Pat Roberts (R-KS), Sen. Marco Rubio (R-FL), Sen. Richard Shelby (R-AL), Sen. Olympia Snowe (R-ME), Sen. John Thune (R-SD), Sen. Pat Toomey (R-PA), Sen. David Vitter (R-LA), Sen. Roger Wicker (R-MS).

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CQ Healthbeat is reporting that nearly every state is taking ObamaCare cash - including those that are fighting the law in court. This reeks of hypocrisy on the part of Republican Governors and state legislators who have authorized the states to fight ObamaCare in the courts. Taking money appropriated by a law that one believe's is unconstitutional is not just hypocrisy, it is a betrayal of the very people who elected you to fight for their freedoms. Reports are that the following states accepted money:

• Alabama, $8.5 million
• Arizona, $29.8 million
• Delaware, $3.4 million
• Hawaii, $14.4 million
• Idaho, $20.3 million
• Iowa, $7.7 million
• Maine, $5.8 million
• Michigan, $9.8 million
• Nebraska, $5.4 million
• New Mexico, $34.2 million
• Tennessee, $1.5 million
• Vermont, $18 million
• Rhode Island, $58.5 million

Today, CMS announced that it had doled out nearly $200 million to 13 states to establish ObamaCare exchanges and released a series of Questions and Answers about the Exchange money.

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Senator Orrin Hatch (R-UT), ranking member of the Senate Finance Committeee, weighed in on a report from the National Governor's Association about the burden that Medicaid, and its expansion under ObamaCare, imposes on the states. From his November 29, 2011 Press Release:

"[T]he National Governors Association’s (NGA) Fiscal Survey of the States demonstrates why repealing the Medicaid Maintenance of Effort requirement, first imposed in the stimulus package and again in the $2.6 trillion health spending law, and modernizing the Medicaid programs is essential to allowing states effectively manage their Medicaid programs." 

"The report released today found that state budget deficits cumulatively amount to at least $365 billion over the next five years and that Medicaid enrollment is up by 17.7 percent with this joint federal-state program making up the largest portion of state budgets. The NGA also found, "spending on Medicaid is expected to consume an increasing share of state budgets and grow much more rapidly than state revenue growth, resulting in slow or no growth in education, transportation or public safety.

Reports about Medicaid can be found: here (from the RGA) and here (from Members of Congress). 

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AHEC has recently completed an extensive fiscal and policy review of the Health Care Compact (HCC or compact), legislation that has been introduced in several states. The conclusion of our fiscal review of the HCC is that the compact's funding formula is fatally flawed and that it will shift $3 trillion of healthcare liabilities from the federal government onto the backs of the states. Our report even provides a break down of the fiscal shortfall that will be created in each state if the compact were to be widely adopted.

Ironically, the group pushing the HCC has confirmed AHEC's $3 trillion figure but has failed to inform state legislators of how this will impact their state's budget. It would be the height of fiscal irresponsibility for a state to pass the compact given the obvious flaws in the funding formula, particularly if a state does not have a plan in place to ensure that the state's most vulnerable citizens will not receive proper health care. Yet some states (Texas, Oklahoma, Georgia and Missouri) have done just that.

READ AHEC'S FULL REPORT ON THE HCC HERE.

AHEC has previously discussed the myriad of problems with the Health Care Compact.  You can read much of AHEC's previous work on the HCC in the following places:

1. AHEC's Blog: The Connection of the HCC to Efforts to Enact Socialized Medicine
2. AHEC's Blog: The HCC will lead to Taxpayer Funding of Abortions and Free HealthCare for Illegal Aliens
3. A Line of Sight: A Conservative Assessment of the HCC

If you are concerned about the implications of the Health Care Compact, please call your state legislators (especially in Tennessee, Wisconsin, Florida, Ohio, Pennsylvania and Michigan and tell them to oppose the Health Care Compact).

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According to media reports, Georgia is asking the federal government to let it become another state to push the cost of providing healthcare to the children of state employees on the backs of federal taxpayers. The Centers for Medicare and Medicaid Services (CMS) has already approved this process for Montana, Alabama, Texas, Kentucky and Pennsylvania.

These states are seeking to push the kids of state employees into the CHIP program, a federal program originally designed to provide health care to kids in lower income families. But this latest move by the states seeks to expand coverage well beyond what the federal program was designed to accomplish.

The national implications of the states attempting to do this are numerous, including:

1. Taxpayers in other states will now be forced to finance the cost of state government in another state through their federal tax dollars. This is unfair to taxpayers nationwide.
2. This will also reduce the incentive for states to fund the benefits they promise and to live within their means.
3. This will lower incentives for states, like Texas and Georgia, to actually come up with appropriate budgetary savings and to live within its means.  For example, Gov. Mitch Daniels (IN) has moved his state employee health plan to HSAs which has reduced the burden on taxpayers and created market incentives for state employees to make better health care decisions.   
4. ObamaCare expands CHIP while reducing the applicable pool of participants in the private insurance market. In this regard, the states that are attempting this maneuver are further reducing that pool which could have negative affects on everyone who relies on private insurance in that state.
5. Finally, the real implications have to deal with the Health Care Compact. Texas and Georgia have both adopted the compact with the promise it would let states "keep their money" and give states control over health care to design more efficient health care systems. The move by Texas and Georgia shows these states are hypocrites when it comes to the promised goals of the compact. It also shows that the compact is filled with nothing more than empty promises and hot air. Otherwise, the HCCA (which is pushing the compact) would be doing far more to hold elected officials in these states accountable instead of giving them a pass to say one thing while doing another. If anyone should be decrying the move by these states it should be Leo Linbeck III (a resident of Texas and co-chair of the HCCA) but his silence on the issue speaks volumes about how ill-conceived the compact really is.

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Among the more ridiculous claims by the Health Care Compact Alliance (HCCA) is the idea that the Health Care Compact (HCC or compact) will allow states to negate, nullify or ignore ObamaCare's individual mandate. The Frequently Asked Questions section of the HCCA's website states the following:

"How is the Patient Protection and Affordable Care Act (“Obamacare”) effected by the Health Care Compact?

The Health Care Compact renders Obamacare inoperable in states that join and pass replacement legislation. It is not, strictly speaking, repeal. It just allows member states to suspend its operation their states. The Health Care Compact creates a "regulatory shield" for states to free them from federal regulations, giving them the ability to design their own system. It does this by:
 1. Giving member states primary responsibility for healthcare regulation
2. Making state healthcare laws supersede federal healthcare laws
 These provisions, taken together, allow states to render Obamacare ineffective in states that join the Health Care Compact."

The suggestion is that by adopting the compact, a state can undo the individual mandate.  The clear language of the compact suggests otherwise.  The actual language of the compact provides states can “suspend” the operation of “federal laws, rules, regulations, and orders regarding Health Care.”  

In order to ascertain if the Compact's language would affect the individual mandate, one first has to understand exactly how federal law treats the individual mandate. ObamaCare's individual mandate is codified as part of the tax code - it requires the reporting of health insurance information on your tax return and the individual mandate assesses a penalty when an individual pays their taxes on April 15.  

The tax code is Title 26 of the United States Code (commonly called the "Internal Revenue Code"). By contrast, most of Medicare, Medicaid and other areas of health care laws are located in Title 42 of the United States Code (the "Public Health & Welfare Code"). 

The individual mandate is really not part of health care law at all, its part of the tax code.  The language of the compact purports to give states power over health care law but says nothing about federal tax law. Therefore, one has to necessarily conclude that even under the best of circumstances that the states will not be able to "suspend" the individual mandate under the Compact.  

When it comes to the individual mandate, advocates of the HCC are over-promising and the compact will certainly under-deliver. These are facts the HCCA would most certainly find very inconvenient.

But that is not where the analysis should end. If one buys the HCCA's rhetoric that the HCC is about "who decides," President Obama has already given his answer in the form of ObamaCare and it is unmistakeable that his answer is the federal government will decide. The simple reality is that if President Obama is re-elected in 2012, subsequent repeal of ObamaCare, or adoption of the compact for that matter, becomes impossible. The danger with the HCC is that it is ignores the reality that 2012 is critical to the defeat of ObamaCare. The compact is proving to be nothing more than a distraction for Tea Party and other conservative activists who should be working to build the mechanics necessary to win in 2012 (rather than pursuing academic theories that won't have its intended effect). In this regard, the HCC amounts to nothing more than a missed opportunity that could actually entrench, rather than undermine, ObamaCare.

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For some inexplicable reason, the Health Care Compact Alliance (HCCA) continues to be a cheerleader for socialized medicine. The HCCA recently posted on its website that: "Vermont’s [system of socialized medicine] represents one of the many ways coverage can be provided as states assume responsibility for their citizens’ health care, the chief goal of the Health Care Compact Alliance (HCCA)." 

In other words, the HCCA has statist goals: promoting state government power over health care instead of individual choice and personal control. This also clearly states that the compact is not inconsistent with socialized medicine, an idea that should trouble any liberty-minded individual.

Back in March of this year, Vice-Chairmen of the HCCA, Leo Linbeck III also acknowledged that the compact and socialized-medicine were not at odds with each other, stating “If a state really wants to do a single-payer system, they should do it.” Linbeck also said “What it’s essentially saying is we’re not going to have a one-size-fits-all program any more." But his endorsement (or at least lack of repudiation) of socialized-medicine ignores the fact that a single-payer system is "one-size-fits-all," just on the state level.

And make no mistake about it, at its core, a single-payer system is at odds with individual liberty as embodied in the Constitution. This form of healthcare places government power ahead of individual liberty, allowing government, not free people or free markets, to determine the value of a physician's work through price controls. A single-payer system will enslave doctors, denying them the ability to be fairly compensated for their education, training and expertise. As a single-payer system takes root, it will lead to doctor shortages (price controls inevitably do), rationing of care, and the government deciding the relative worth of individuals in need of medical care - all of these will deny each American access to proper medical care.

Listen to what Ronald Reagan had to say about socialized medicine:

Much of the HCCA rhetoric speaks in terms of individual liberty versus federal government power but the clear messaging from the compact's advocates is that state government - not individuals - will have the power to make health care decisions. Accordingly, the HCCA is promoting government power and control not individual liberty. 

The appeal of the compact is that it appears to advance states' rights, a goal most conservatives would share. However, thinking conservatives support states' rights as merely a means to an end, the end being the defense and preservation of individual liberty. With respect to the compact, the HCCA holds up the means (states' rights) as the end to be served, losing sight altogether of freedom and liberty.  And the HCCA's repeated endorsement and/or acceptance of socialism proves that Linbeck and others at the HCCA hold no regard for the end that every American supports - personal freedom!      

Linbeck and others who support the compact fail to understand that socialism is an evil that will inevitably result in a denial of individual liberty. In this regard, the Health Care Compact is no different than ObamaCare. It is a misguided effort for those in government to gain power and control over our money, our healthcare and our lives. 

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Nearly two years ago, before a joint session of Congress, President Obama promised that his law would not benefit illegal aliens. He stated: “The reforms I'm proposing would not apply to those who are here illegally.”  In his now famous response, Congressman Joe Wilson stood up for every American and responded, "You Lie!"

It turns out that Congressman Wilson was right - the President did lie.  According to CNS News, grant money from ObamaCare is flowing to community health clinics and at least $8.5 million taxpayer dollars will be steered towards programs to provide health care to migrant farm workers which include a large share of illegal aliens.  A spokeswoman for HHS stated that the clinics would not check the immigration status of those seeking care which means ObamaCare will be directly providing free health care to many illegal aliens. Judy Andrews, the HHS spokesperson stated: “The Program’s authorizing statute does not affirmatively address immigration status,” and continued, “Rather, it simply states that health centers are required to provide primary health care to all residents of the health center's service area without regard for ability to pay.”

Hat tip to Karl Filippini of the Federation for American Immigration Reform (FAIR) for his blog posting earlier today.

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On Monday, Republican governors from 29 states sent a letter to House Energy & Commerce Committee Chairman Fred Upton (R-MI) and Senate Finance Committee Ranking Member Orrin Hatch (R-UT) detailing seven principles for Medicaid reform. (The RGA was in response to a letter referenced here that was sent by Senator Hatch).  

In regards to the letter, Texas Governor Rick Perry, who chairs the Republican Governors Association stated: "Aside from the full repeal of Obamacare, no issue is more important to fixing our nation's healthcare system than improving Medicaid. Governors must be given the flexibility to craft solutions based on their states' specific needs without constantly needing to ask the federal government for permission."

According to a press release from the RGA, the seven principles for reform are:

1. States and territories are best able to make decisions about the design of their healthcare systems based on the respective needs, culture and values of each state.

2. States and territories should also have the opportunity to innovate by using flexible, accountable financing mechanisms that are transparent and that hold states accountable for efficiency and quality healthcare. Such mechanisms may include a block grant, a capped allotment outside of a waiver, or other accountable and transparent financing approaches.

3. Medicaid should be focused on quality, value-based and patient-centered programs that work in concert to improve the health of our states' citizens and drive value over volume, quality over quantity, at the same time containing costs.

4. States and territories must be able to streamline and simplify the eligibility process to ensure coverage for those most in need, and states must be able to enforce reasonable cost sharing for those able to pay.

5. States and territories can provide Medicaid recipients a choice in their healthcare coverage plans, just as many have in the private market, if they are able to leverage the existing insurance marketplace through innovative support mechanisms.

6. Territories must be ensured full integration into the federal healthcare system so they can provide healthcare coverage to those in need with the flexibility afforded to the states.

7. States must have greater flexibility in eligibility, financing and service delivery in order to provide long-term services and support that keep pace with the people Medicaid serves. New federal requirements threaten to stifle state innovation and investment. In addition, since dual eligibles now constitute 39 percent of Medicaid spending, Medicare policies that shift costs to the states must be reversed and the innovative power of states should be rewarded by a shared-savings program that allows full flexibility to target and deliver services, which are cost-effective for both state and federal taxpayers.

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