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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Senator Orrin Hatch (R-UT) made several good points about the real cost of ObamaCare, including:

• $2,100 increase in premiums for families buying insurance on their own due to ObamaCare. (Letter from the Congressional Budget Office to Senator Evan Bayh regarding health care premiums, November 30, 2009)
• 65 percent of small businesses say it does nothing to slow down the cost of health insurance – the primary cost driver facing our nation’s job creators despite President Obama’s pledge to reduce premiums for American families by $2,500. (National Federation of Independent Business (NFIB) Foundation Study, July 2011)
• 77 percent of small businesses say it will increase taxes which in turn will directly affect their ability to create jobs. (National Federation of Independent Business (NFIB) Foundation Study, July 2011)
• Insurance premiums have increased by almost 200 percent from 3 percent in 2010 to 9 percent in 2011 for families since the passage of the partisan health law. (Annual employer health benefits survey conducted by the Kaiser Family Foundation and the Health Research & Educational Trust, September 27, 2011)
• 9.4 percent increase in private health insurance premiums in 2014 (4.4 percentage points higher than without the health law). (“National Health Spending Projections Through 2020: Economic Recovery And Reform Drive Faster Spending Growth,” Health Affairs, July 28, 2011)
• The cost of health care will continue to rise from 8 percent in 2011 to 8.5 percent in 2012. (Pricewaterhouse Coopers Health Research Institute Study, Medical Cost Trends for 2012)
• $311 billion projected increase in health costs due to ObamaCare. (Report from Richard S. Foster, Chief Actuary at the Centers for Medicare & Medicaid Services, April 22, 2010)
• The President's own Chief Actuary stated that savings from the health law’s programs, estimated by the Administration to be $50 billion over 10 years, are 'unlikely.' (Letter from Richard S. Foster, Chief Actuary at the Centers for Medicare & Medicaid Services, September 2, 2011)
• $118 billion in new costs imposed on states for ObamaCare's Medicaid expansions—budgetary costs that will crowd out other state programs like education or law enforcement. (Joint Report by the Senate Finance Committee and House Energy and Commerce Committee, Medicaid Expansion in the New Health Law: Costs To The States, March 1, 2011)

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In response to the revelation that the Obama Administration and the IRS have decided to ignore federal law and extend ObamaCare exchange subsidies to federal exchanges in the event a state does not set up an exchange (federal law only permits subsidies for state-established exchanges), Republican Senator Orrin Hatch (Utah) wrote the following to Department of Treasury and IRS officials: “The legislative function, under the Constitution, is exclusively granted to Congress. This excessive use of regulatory authority is only the continuation of a trend by the Treasury Department and the IRS of violating the constitutional principle of separation of powers by usurping Congress’ exclusive role in law-making."

As Hatch's press release explains, "Under the $2.6 trillion health law, Americans purchasing coverage through the new health insurance exchanges can receive tax credits and subsidies to offset the cost of being mandated to buy health insurance. However, the language of the relevant law (Section 36B) limits the premium assistance to state run exchanges. The IRS has proposed a new rule to expand the premium assistance to include federal exchanges. If implemented, these regulations would alter the impact of the new law without the approval of Congress."

Hatch continued in his letter to the Administration: “I would suggest that the failure to draft this language differently was the result of the highly partisan nature by which PPACA was pushed through Congress,” wrote Hatch. “Whatever the case, if the wording and effect of section 36B should somehow be different, then legislation is the appropriate means of changing section 36B.”

The decision by "Pay-No-Taxes" Treasury Secretary Timothy Geithner to ignore the exchange subsidy requirement of federal law is not the first controversial action taken by Obama Administration officials in direct contradiction of ObamaCare.  HHS Secretary Kathleen Sebelius also ignored the clear wording of the statute when she unlawfully gave herself the authority, through HHS regulations, to issue waivers from ObamaCare's minimum coverage provisions. ObamaCare does not allow the Secretary to issue waivers. Like the IRS and the subsidies, she gave herself that authority.

This is a clear pattern by the Administration to ignore the limits of federal law, such as ObamaCare, even when the law itself is an unprecedented expansion of government power that itself ignores the Constitution. When Congress ignores the Constitution to legislate and the Executive Branch ignores the law to implement, we no longer are a free republic but a nation governed by tyrants and despots. 

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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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