Prescription for Disaster

States Can Improve Their Business Climate by Rejecting Establishment of ObamaCare Exchange

Monday, April 23, 2012

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.

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC


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HHS Issues Exchange Regulations

Tuesday, March 13, 2012
Yesterday, the Obama Administration issued the long-awaited and overdue regulations related to the creation of ObamaCare insurance exchanges (a copy of the regulations can be found here). The regulations were met with criticism from Virginia Governor Bob McDonnell on behalf of the Republican Governor's Association which echoed concerns AHEC has been raising about the idea of exchanges for more than a year. 

The RGA press release on the subject had this to say:

“Once again, the Obama administration has overpromised, oversold and under-delivered, this time with regards to granting states the flexibility needed to establish and maintain health insurance exchanges. The regulations issued today by the Department of Health and Human Services extend the federal government’s reach into the states and will cost the states millions of dollars annually to operate. This Administration’s inability to provide critical guidance to their broken healthcare reform mandate gives more and more credence to the necessity of the Supreme Court ruling this law unconstitutional.”

The pre see release also pointed out the following shortcomings of the regulations:

  • No clarity on what benefit mandates will be imposed on states
  • No clarity on cost-sharing
  • No clarity on risk adjustment and reinsurance
  • No clarity on the federal health insurance exchange that would be forced upon states if they refuse to implement the law
  • No clarity regarding who will pay for a federal health insurance exchange
  • No clarity on “partnership exchanges”
AHEC again renews its call for states to forego the creation of a state exchange (like Florida and Louisiana have decided to do). This is the only way that states can avoid being saddled with future mandates and burdens of ObamaCare.

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC


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HHS Issues Exchange Regulations

Tuesday, March 13, 2012
Yesterday, the Obama Administration issued the long-awaited and overdue regulations related to the creation of ObamaCare insurance exchanges (a copy of the regulations can be found here). The regulations were met with criticism from Virginia Governor Bob McDonnell on behalf of the Republican Governor's Association which echoed concerns AHEC has been raising about the idea of exchanges for more than a year. 

The RGA press release on the subject had this to say:

“Once again, the Obama administration has overpromised, oversold and under-delivered, this time with regards to granting states the flexibility needed to establish and maintain health insurance exchanges. The regulations issued today by the Department of Health and Human Services extend the federal government’s reach into the states and will cost the states millions of dollars annually to operate. This Administration’s inability to provide critical guidance to their broken healthcare reform mandate gives more and more credence to the necessity of the Supreme Court ruling this law unconstitutional.”

The pre see release also pointed out the following shortcomings of the regulations:

  • No clarity on what benefit mandates will be imposed on states
  • No clarity on cost-sharing
  • No clarity on risk adjustment and reinsurance
  • No clarity on the federal health insurance exchange that would be forced upon states if they refuse to implement the law
  • No clarity regarding who will pay for a federal health insurance exchange
  • No clarity on “partnership exchanges”
AHEC again renews its call for states to forego the creation of a state exchange (like Florida and Louisiana have decided to do). This is the only way that states can avoid being saddled with future mandates and burdens of ObamaCare.

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC


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HHS Issues Exchange Regulations

Tuesday, March 13, 2012
Yesterday, the Obama Administration issued the long-awaited and overdue regulations related to the creation of ObamaCare insurance exchanges (a copy of the regulations can be found here). The regulations were met with criticism from Virginia Governor Bob McDonnell on behalf of the Republican Governor's Association which echoed concerns AHEC has been raising about the idea of exchanges for more than a year. 

The RGA press release on the subject had this to say:

“Once again, the Obama administration has overpromised, oversold and under-delivered, this time with regards to granting states the flexibility needed to establish and maintain health insurance exchanges. The regulations issued today by the Department of Health and Human Services extend the federal government’s reach into the states and will cost the states millions of dollars annually to operate. This Administration’s inability to provide critical guidance to their broken healthcare reform mandate gives more and more credence to the necessity of the Supreme Court ruling this law unconstitutional.”

The pre see release also pointed out the following shortcomings of the regulations:

  • No clarity on what benefit mandates will be imposed on states
  • No clarity on cost-sharing
  • No clarity on risk adjustment and reinsurance
  • No clarity on the federal health insurance exchange that would be forced upon states if they refuse to implement the law
  • No clarity regarding who will pay for a federal health insurance exchange
  • No clarity on “partnership exchanges”
AHEC again renews its call for states to forego the creation of a state exchange (like Florida and Louisiana have decided to do). This is the only way that states can avoid being saddled with future mandates and burdens of ObamaCare.

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC


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Senate Republicans Weigh in and File Amicus Brief in ObamaCare Lawsuit

Tuesday, February 14, 2012
Forty-three Senate Republicans signed onto an Amicus Brief filed with the Supreme Court in response to the multi-state lawsuit challenging the constitutionality of ObamaCare.  Excerpts from the brief include:

  • “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).

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC 


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States that Want to Oppose ObamaCare Must First Oppose the Exchanges

Tuesday, December 20, 2011
A new article explains that the strategy of states to oppose ObamaCare by opposing establishing a health insurance exchange is a winning strategy. ObamaCare seeks to have states establish "exchanges" whereby the ObamaCare's entitlement subsidies would be doled out. States are being asked to set up the exchanges (and fund them with only minimal federal assistance dollars) even before the feds tell the states all the rules that will come with the federal money. The feds strategy is one that is designed to get the states to jump before they even know how the proverbial cliff is.

Many states - Alaska, Florida and Louisiana have flat out refused to create an exchange. The Michigan House recently killed funding for the creation of an exchange. What is the fallback? Under ObamaCare, if a state fails to set up an exchange, the feds can set one up in the state.  But that is proving to be no small feat. Many states that are working to set up exchanges don't have the right technology infrastructure, the feds have yet to define the essential benefits package that states must offer and it is completely unclear about whether states or the feds will have the ultimate control over the exchanges (given how the feds have engaged in power grab after power grab with respect to health care over the past 50 years, my guess is the feds will use the ObamaCare funding to grab away state power).

Opponents of ObamaCare see a winning strategy in opposing the establishment of the exchanges in the states - a strategy they believe can ultimately prove to be ObamaCare's undoing. Other less thoughtful people on the issue of healthcare see no problem with setting up the exchanges. For example, Leo Linbeck III who is pushing the health care compact (he says to rid states of the federal monopoly over healthcare) has said: "And there are some good ideas embedded in the bill. The idea of health insurance exchanges... is not all bad. It’s essentially an attempt at a market solution." Linbeck's naiveté and ignorance over how ObamaCare works and how it is being implemented would be cute if it wasn't so dangerous. To accept the exchanges is to fully embrace ObamaCare, its co-opting of state budgets and state autonomy, and the looming fiscal crisis ObamaCare represents to the states. 

No one who understands how the federal government has operated in the field of healthcare in grabbing control over the states could rightly support the exchanges. This raises the question about why people like Linbeck are pushing the compact. If they know so little about ObamaCare how are they remotely positioned to design an effective strategy to undermine the law (as Linbeck says the HCC is designed to do). This suggests Linbeck has motives other than undermining ObamaCare (which could be why he is involved in a primary accountability effort to unelect the very Republicans who will be necessary to repeal ObamaCare in 2013).

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC


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Michigan House Rejects ObamaCare Exchanges

Monday, December 19, 2011
According to The Detroit Free Press, the Michigan legislature voted against funding the creation of an ObamaCare exchange in the state. A spokesman for House Speaker Glen Bolger stated it was "premature to set up any health insurance exchange in Michigan" until the U.S. Supreme Court decides on whether ObamaCare is constitutional. 

The State Legislature should be commended for their action - they clearly understand that the federal government is trying to induce states to set up, fund and implement the exchanges all BEFORE the feds tell the states what the rules will be for how the states must operate the exchange in order for people to get ObamaCare insurance subsidies. Simply put, the feds are hoping states will blindly set up exchanges and then the feds can co-opt the exchanges with a heavy-handed, top-down set of federal rules. States would have no ability to stand up to the feds at that point because, in some states, millions of people would have no access to insurance if the states insisted upon operating the exchange free of federal intrusion.

Foolishly, Michigan's novice Governor, Rick Snyder, has said he supports setting up a state controlled exchange. So too does Michigan's Director of Licensing and Insurance Regulation, Steve Hilfinger. What these naive individuals think is that they can maintain leverage against the feds by implementing ObamaCare now. The best way to maintain the state's leverage is to wait - as the House has wisely chosen to do. 

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC

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States May Oppose ObamaCare, But they are Lining Up for ObamaCare's Cash

Wednesday, November 30, 2011

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.

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC.


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Sen. Hatch Comments on Need for Medicaid Flexibility for the States

Wednesday, November 30, 2011
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). 


Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC.


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Mackinac Center Takes State Republican Senators to the Woodshed over ObamaCare Exchanges

Thursday, November 17, 2011

Jack McHugh of Michigan's Mackinac Center explains how 13 Republican Senators voted for ObamaCare exchanges and how the played politics in a way that suggests the violated their oath of office. State Senators Darwin Booher, Bruce Caswell, Judy Emmons, Mike Green, Geoff Hansen, David Hildenbrand, Mark Jansen, Rick Jones, Roger Kahn, Jim Marleau, Arlan Meekhof, John Pappageorge and Randy Richardville voted to authorize the creation of ObamaCare exchanges by which ObamaCare's insurance subsidies can be distributed.

Here is what McHugh had to say:

"A few minutes [after the exchange vote], these same Republicans (plus several others who voted against creation of the agency - the "exchange") voted for a resolution that included the following assertion about the PPACA: 'The act violates the U.S. Constitution, including the Ninth and Tenth Amendments and the constitutional principles of federalism and dual sovereignty on which this nation was founded.'"

"Some are saying that by their own admission these lawmakers declared that they had just violated the U.S. Constitution, which 10 months ago they all swore an oath to support. These politicians will claim that this characterization is unfair and simplistic, because Obamacare forces lawmakers to choose between two unpalatable options: Implement what they consider an unconstitutional law themselves, or let the federal government do so, possibly in ways that are even more harmful to Michigan....  The senators' oath to uphold the Constitution, however, doesn’t contain an “opt-out” clause."

AHEC has repeatedly told states not to implement the exchanges because this is the manner by which the federal government will be able to implement a government takeover of health insurance by leveraging federal dollars over states, individuals and insurers. The Michigan Senate 13 (MS-13) should be ashamed of their vote - they have just voted to impose irreparable harm on the citizens of their state.

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC.


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