In the wake of the recent 5-4 Supreme Court decision holding the Affordable Care Act (“Obamacare”) constitutional as a tax, the conventional wisdom is that the only way to save America from the consequences of Obamacare is via the ballot box. Elect a Republican majority to the U.S. Senate, keep the Republican majority in the House, replace President Obama in the White House, and then hope they keep their promises and repeal Obamacare.
There is another, very potent option. That option, which has two components, rests in state capitals across the nation.
By a 7-2 vote, the Supreme Court held that the federal government couldn’t punish the states if they choose to not expand their Medicaid rolls. Obamacare can’t work unless they do so. More than half of the uninsured targeted for coverage under Obamacare are supposed to receive that coverage via Medicaid, thus getting the states to shoulder much of the cost. But states are struggling to balance their budgets with their current Medicaid burden. It makes no sense for them to expand their Medicaid rolls even further.
By choosing to not expand their Medicaid rolls, they place a huge obstacle in the path of implementing Obamacare. The population originally planned for placement into Medicaid will have to seek coverage via the Obamacare exchanges. Which brings us to the second part of this option.
According to the Affordable Care Act, the federal government will set up a health insurance exchange in any state that chooses not to create its own exchange. It is through these exchanges that people will obtain their government-approved health insurance. The state reaps no advantage from creating an exchange. This is because the state must carry out all federal directives in operating and implementing the exchange, and has no autonomy in the matter. In effect, all it does is make the state act as the proxy — the executive secretary, if you will — for the federal government in operating its exchange.
But according to explicit wording in the Affordable Care Act, if the states let the federal government create the exchanges, then residents of those states will not be able to receive federal subsidies to help them purchase the super-expensive, government-designed, government-mandated health insurance. Without those subsidies, few people would want to purchase these expensive policies.
What’s more, if instead of the states, the federal government creates the exchanges, small businesses are exempt from the onerous employer mandates. This rescues small businesses from the huge financial burden Obamacare places upon them. It will enable them to expand and add jobs without fear of financial insolvency from health insurance mandates.
In short, if the states don’t create their own exchanges, Obamacare won’t work.
So the cloud of the Supreme Court’s Obamacare decision indeed comes with a silver lining. It leaves the states holding all the cards. The future of Obamacare is in their hands.
Arizona’s legislature has already made it clear it is not interested in setting up an exchange. The state can barely afford its present Medicaid population and has recently enacted cutbacks. Arizona’s Governor Brewer can help throw a wrench into the gears of the Obamacare machine and grind it to a halt — if she joins states like Texas, Florida, Wisconsin, Louisiana, Nebraska, and others by saying “no” to Obamacare. No Medicaid expansion. No state-run exchanges.
Regardless of the outcome of this November’s election, if state legislatures and governors choose not to play the Obamacare game, then the game is over.
The governors who have voiced opposition to Obamacare have “talked the talk.” Now it is time for them to “walk the walk.”
Jeffrey A. Singer, MD practices general surgery in Phoenix, AZ and is an adjunct scholar at the Cato Institute.