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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Mitt Romney has repeatedly said that if he were elected President he would issue an executive order that would give an ObamaCare waiver to every state and that would effectively repeal ObamaCare. The problem with this approach is that the EO would be unlawful. 

When Congress creates a law, agencies are required to implement the law as Congress has written. Now, Congress has routinely delegated certain authorities to the President, a Secretary or an Agency head allowing an official in the Executive Branch and this has included discretion as to how to implement a law and the power to promulgate regulations in furtherance of Congressional intent. Congress has also given the Secretary of HHS the express power to issue waivers, for example, related to a state's Medicaid program. 

As AHEC has previously explained, the problem with HHS's issuance of waivers under ObamaCare is that Congress did not give HHS any authority whatsoever to issue waivers related to the minimum coverage requirements of ObamaCare. Where, then, does HHS Secretary Sebelius derive her so-called "authority" to issue waivers? Contrary to federal law - she bestowed that power upon herself by issuing regulations that granted her that power. This is an unlawful grant of authority and the exercise of this authority is a direct violation of federal law (waivers have been issued for political purposes - to isolate groups from the affects of ObamaCare in advance of the 2012 election).

So, as Michael Cannon from CATO, explains the proposed RomneyCare waiver is equally unlawful. Cannon also explains an alternative that the next President could take that would dramatically undermine ObamaCare. Canon writes:

"there is one executive order that could effectively block ObamaCare, and that lies well within the president’s powers. The Obama administration has issued a proposed IRS rule that would offer 'premium assistance' (a hybrid of tax credits and outlays) in health insurance 'exchanges' created by the federal government. The only problem is, ObamaCare only authorizes these tax credits and outlays in 'an Exchange established by the State.' The administration did so because without premium assistance, ObamaCare will collapse, at least in states that do not create their own Exchanges. Yet the executive branch does not have the power to create new tax credits and outlays. Only Congress does. So if the final version of this IRS rule offers premium assistance in federal Exchanges, it will clearly exceed the authority that Congress and the Constitution have delegated to the executive branch. In that case, the next president could issue an executive order directing the IRS either not to offer premium assistance in federal Exchanges or to rescind this rule and draft a new one that does not."

UPDATE: The IRS has sent a letter to at least one Member of Congress saying it will move ahead and allow exchange subsidies to be handed out from federal exchanges (despite the clear lack of authority).

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

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.

The Galen Institute has put together a very thoughtful list of healthcare reform ideas (and ideas to avoid) for the so-called "Congressional Super Committee" that is charged with producing nearly $1.5 trillion in budgetary savings. You can read the full list of reforms here. 

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

1. Raising the age for Medicare eligibility, starting in 2014, by two months until it reaches 67 in 2025. For someone who turns 65 in 2014, Lieberman says, they will wait an additional 60 days before becoming eligible for Medicare. Lieberman says, "that’s a small sacrifice to ask for the benefits you will receive from a healthy Medicare program for the rest of your life."
2. Reforming "the complex Medicare benefit structure" by creating a single Part A and Part B deductible; requiring co-pays for all Medicare services; while capping out-of-pocket costs.
3. Raising premiums for new enrollees in Part B (doctor’s services) and Part D (prescriptions) "starting in 2014 to 35 percent of program costs."  Lieberman points out that: "asking Americans to pay more won’t be popular, but doing nothing and allowing Medicare to go bust won’t be popular either."
4. Reforming Medigap (but Lieberman does not offer specific for reforms in this area). 
5. Increasing taxes on "higher-income Americans" forcing them to "pay an additional 1 percent of every dollar they earn over $250,000 to help save the program."