NCPA - National Center for Policy Analysis

A Collective Veto Could Nullify ObamaCare

March 28, 2013

Many provisions of the Affordable Care Act ("ObamaCare") seek to expand access to health care but are not in the best interests of the states. Thirty-four states have already refused to create health care exchanges and many others are currently deciding whether to expand Medicaid coverage as envisioned by the ObamaCare mandate. The Obama administration is still trying to coerce states into implementing parts of the expansion the Supreme Court viewed as optional. States should collectively veto the exchanges and Medicaid expansion, which would force Congress to reconsider or repeal the mandate, says Michael Cannon, director of health policy studies at the Cato Institute.

  • States can reduce federal deficits by $1.7 trillion if they refuse to implement the exchanges and Medicaid expansion mandated by ObamaCare.
  • The Supreme Court has already ruled that the federal government cannot force states to create the exchanges, the creation of which would violate state law and raise taxes in many states.
  • Each state has the ability to takes its time implementing an exchange and always has the ability to switch to a state-funded exchange.

Even the state-funded exchanges are still controlled by the federal government, which has yet to provide information on how the federal exchanges will be different.

  • With a majority of Americans opposed to the health care mandate, states should not only refuse to create exchanges but should also block the employer mandate, which penalizes employers that fail to offer health benefits with a $2,000 fine.
  • States can protect employers by refusing to create exchanges, which nullifies the tax credits that penalize a state's employers.
  • States can also collectively exempt at least 12 million low- and middle-income individuals from the expensive individual mandate, which requires nearly all Americans to purchase a health insurance plan or pay a tax to the Internal Revenue Service.

Additionally, refusing to create exchanges will reduce the federal deficit, assuming the Internal Revenue Service rescinds the tax credit rule it created, which extends subsidies to federal exchanges. Because Medicaid is full of fraud and expansion would raise the debt and cost each state money in the long run, states can force Congress' hand by collectively vetoing the exchanges and Medicaid expansion. Ideally, this would render the mandate irrelevant.

Source: Michael Cannon, "50 Vetoes: How States Can Stop the Obama Health Care Law," Cato Institute, March 21, 2013.


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