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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Burr-Coburn: The Best Medicare Reform Plan to Date

Wednesday, February 22, 2012
Avik Roy of Forbes Apothecary has commented on the Burr-Coburn Medicare reform plan calling it the best reform plan introduced to date.  According to his column, their plan achieves each of six important principles for reform: "(1) preserving benefits for people aged 55 and older; (2) making sure that retirees share more of the costs of their care, and thereby a stake in prudent consumption; (3) means-testing; (4) indexing the Medicare retirement age to life expectancy; (5) aggressive fraud prevention; (6) allowing seniors to shop for value in insurance plans."

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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Thirty-Six Senate Republicans File Amicus Brief on ObamaCare

Monday, January 09, 2012
Thirty-Six Senate Republicans filed an amicus brief with the Supreme Court in favor of the states' lawsuit against ObamaCare.  The brief argues that: 

“This Court must defer to this clear expression of Congress’ intent regarding the role of the individual mandate… To maintain the Constitution’s balance, this Court cannot ignore Congress’ determination as to what is essential to the PPACA’s scheme and leave in place a statute Congress would not—and did not—enact.”

“If Congress intended for the PPACA to survive without the individual mandate, it could have protected its major legislative reform simply by including a clause which would have guided this Court and resulted in a strong presumption of severability – a clause which was already before it in a prior version of the PPACA. Congress did not do so.

“Under these circumstances, this Court cannot leave a patchwork alternative to the PPACA in place without the heart of the legislation. Rather, such a determination must be left to the elected representatives of the people.”

The brief was signed by: 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. John Cornyn (R-TX), Sen. Mike Crapo (R-ID), Sen. Michael Enzi (R-WY), Sen. Chuck Grassley (R-IA), Sen. Orrin Hatch (R-UT), 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. Mitch McConnell (R-KY), Sen. Lisa Murkowski (R-AK), Sen. Rand Paul (R-KY), 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).

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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The Health Care Compact is A Trojan Horse That Will Decimate State Budgets

Saturday, October 29, 2011

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).

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


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