NCPA - National Center for Policy Analysis

Six Reasons to Oppose ObamaCare

April 26, 2013

Since different provisions of ObamaCare entered the implementation phase over the past year, 34 states have decided against implementing some of the provisions necessary to create the law's health insurance exchanges. This leaves the responsibility to the federal government. For states questioning whether to implement ObamaCare, there are six reasons to oppose implementation, says Peter Suderman, a senior editor at Reason Magazine.

  • Because of the Supreme Court's 2012 ruling that the federal government cannot mandate states to create exchanges or expand Medicaid, states should exercise their option not to implement these ObamaCare provisions.
  • States that opted to create their exchanges were told to submit proposals by November 2012, which was pushed back to December, and then earlier this year. The bureaucrat in charge of reviewing the exchange proposals admitted that there is no deadline and one of the chief designers of ObamaCare said that there is no reason to set up an exchange in 2013 or 2014.
  • A loophole in the wording of ObamaCare means that states that refuse to create an exchange could protect the state's businesses from a $2,000 per employee fine. Under the mandate, the fine is levied on employers who do not offer health coverage to their employees and funds private insurance subsidies, but the loophole only allows subsidies in states with exchanges.
  • States can also protect an estimated 12 million people from the individual mandate. Those without health coverage are supposed to pay a penalty but if insurance premiums are more than 8 percent of their household income, they are exempt from the penalty. In states with no exchanges, no subsidies will be offered, making it more likely that low- and middle-income individuals would be exempt from the law's mandate.
  • According to the Congressional Budget Office, rejecting the exchanges will save states $1.2 trillion in subsidy expenditures by 2023.
  • Politically, states that decide to create their own exchange run the risk of taking the blame if the exchange fails. For state and local politicians, the inevitable effects of the health care mandate -- higher premiums, a crowded system and reduced access -- will reflect poorly on them if they create exchanges.

Source: Peter Suderman, "6 Reasons Why States Should Continue to Oppose ObamaCare," Reason Magazine, April 17, 2013.


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