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Elections, Politics

12 reasons for states NOT to establish Obamacare exchanges

Posted: November 15, 2012 at 8:00 am   /   by

Following up from the previous post . . . In Obamacare Is Still Vulnerable, Michael Cannot provides an enumeration of reasons why states should definitely not set up state exchanges to implement Obamacare:

First, states are under no obligation to create one.

Second, operating an Obamacare exchange would be illegal in 14 states. Alabama, Arizona, Georgia, Idaho, Indiana, Kansas, Louisiana, Missouri, Montana, Ohio, Oklahoma, Tennessee, Utah, and Virginia have enacted either statutes or constitutional amendments (or both) forbidding state employees to participate in an essential exchange function: implementing Obamacare’s individual and employer mandates.

Third, each exchange would cost its state an estimated $10 million to $100 million per year, necessitating tax increases.

Fourth, the November 16 deadline is no more real than the “deadlines” for implementing REAL ID, which have been pushed back repeatedly since 2008.

Fifth, states can always create an exchange later if they choose.

Sixth, a state-created exchange is not a state-controlledexchange. All exchanges will be controlled by Washington.

Seventh, Congress authorized no funds for federal “fallback” exchanges. So Washington may not be able to impose Exchanges on states at all.

Keep reading for the rest. Note the intriguing possibilities in #7. Just like with the IRS Rule mentioned in the previous post, this may be one of those vulnerabilities created by Obamacare’s psychotically byzantine language. Per Hugh Hewitt’s emphatic appeal, states should seek out an exploit any weakness in the law that they can find. The more challenges, the better.

Cannon also notes that states should refuse to expand Medicare . . .

Medicaid is rife with waste and fraud. It increases the cost of private health care and insurance, crowds out private health insurance and long-term-care insurance, and discourages enrollees from climbing the economic ladder. There is scant reliable evidence that Medicaid improves health outcomes, and no evidence that it is a cost-effective way of doing so.

My colleague Jagadeesh Gokhale estimates that expanding Medicaid will cost individual states up to $53 billion over the first ten years. That’s before an emboldened President Obama follows through on his threats to shift more Medicaid costs to states.

Neither the states nor the federal government have the money to expand Medicaid. If all states politely decline, federal deficits will shrink by another $900 billion.

Now is not the time to go wobbly. Obamacare is still harmful and still unpopular.

The election was a big blow—to lovers of liberty and to opponents of Obamacare. But a big blow is not the same as a knockout. States, and individuals, need to steady ourselves and carry on with the fight. Liberty has faced bigger challenges than this and come through. It is our role to see that happens here and now.

Christopher Cook

Christopher Cook

Managing Editor at Western Free Press
Christopher Cook is a writer, editor, and political commentator. He is the president of Castleraine, Inc., a consulting firm providing a diverse array of services to corporate, public policy, and not-for-profit clients.

Ardently devoted to the cause of human freedom, he has worked at the confluence of politics, activism, and public policy for more than a decade. He co-wrote a ten-part series of video shorts on economics, and has film credits as a researcher on 11 political documentaries, including Citizens United's notorious film on Hillary Clinton that became the subject of a landmark Supreme Court decision. He is the founder of several activist endeavors, including (now a part of Western Free Press) and He is currently the managing editor of and principal contributor to
Christopher Cook

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12 reasons for states NOT to establish Obamacare exchanges