States should reject Obamacare exchanges

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Nicole Kaeding
Budget Analyst, Cato Institute
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      Nicole Kaeding

      Nicole Kaeding is a budget analyst for the Cato Institute focused on federal and state spending policy. Nicole’s articles have appeared in the Chicago Tribune, The Hill, National Review Online, and other publications. Previously, she was the state policy manager for Americans for Prosperity Foundation, where she oversaw the organization’s activities in 34 states. Before that, Nicole was a manager and bank officer at Fifth Third Bancorp for six years and a financial advisor at American Express. She graduated from Miami University with bachelors degrees in finance and political science and holds a masters degree in economics from DePaul University.

Finally, this whole process begs the question as to why the federal government wants the states to create the exchanges in the first place. The answer is quite simple: The federal government doesn’t have the ability or funding to create a federally operated exchange for every state. President Obama’s newest budget requests an additional $1 billion for HHS to create the federal exchange — $1 billion was previously appropriated — but this request will not pass Congress.

Additionally, due to a drafting error in the rush to pass the bill, Congress did not provide tax subsidies to aid individuals’ purchases in federal exchanges, only in state exchanges. That means businesses in states that do create state exchanges will face higher fines than businesses in states that do not. Further, the federal government isn’t even certain it can create a functioning federal exchange by open-enrollment on October 1, 2013.

The bottom line is that the promises of flexibility are illusory, and conservatives should not assist the federal takeover of health care by implementing health care exchanges. States should just say no to Obamacare.

Nicole Kaeding is the state policy analyst at Americans for Prosperity, which tracks state health care exchanges at www.AmericanHealthCareFreedom.com.