National view: States rightly refuse to enable Obamacare

Champions of Obamacare want Americans to believe the president’s re-election ended the battle over the law. It did no such thing. The Patient Protection and Affordable Care Act is heavily dependent on the states for its implementation.

Republicans hold

30 governorships, and the Republican Governors Association has made it clear it remains highly critical of the health law. Some Republican governors, including Wisconsin’s Scott Walker, are refusing to do the federal government’s bidding. Several Democratic governors, including Missouri’s Jay Nixon and West Virginia’s Earl Ray Tomblin, also have expressed serious concerns.

Talk of the law’s inevitability seems intended to pressure governors into implementing the law on the administration’s behalf. But states still have two key choices to make that together put them in the driver’s seat: whether to create state health insurance exchanges and whether to expand Medicaid. They should say “no” to both.

Running the exchanges promises to be an administrative nightmare for states, requiring a complicated set of rules, mandates, databases and interfaces to establish eligibility, funnel subsidies and facilitate purchases. All this would have to take place under broad and often incoherent statutory requirements and federal regulations that have yet to be written.

The exchanges would create unsustainable pressures on states’ insurance markets, treating similarly situated people differently by providing far greater subsidies for people in the exchanges than people in employer plans — yielding perverse incentives that distort consumer and employer decisions and increase costs.

States would endure all this simply to become functionaries of the federal government. The idea that creating state exchanges would give states control over their insurance markets is a fantasy. The states would be enforcing a federal law and federal regulations with very little room for independent judgment.

By declining to build exchanges, states like Wisconsin are passing the burden and costs of the exchanges to the administration that sought the law. And it is far from clear that the administration could operate the exchanges on its own.

Congress didn’t allocate money for administering federal exchanges, and the law as written seems to prohibit federally run exchanges from providing subsidies to individuals. The administration insists it can provide those subsidies anyway. But if the courts read the plain words of the statute, then federal exchanges couldn’t really function.

Thus states that refuse to create their own exchanges effectively would be repealing a large part of the law, sparing their citizens from the job-killing employer mandate and from assaults on their religious liberty. In some cases people would even be spared from the individual mandate to buy coverage, since in the absence of exchange subsidies more families would qualify for exemptions from the mandate.

President Obama won re-election and Democrats maintained control of the Senate, but the states hold the future of Obamacare in their hands. Knowing the harm the law would do to their citizens, to the economy and to American health care, governors like Walker are refusing to become its enablers.

James C. Capretta is a fellow at the Ethics and Public Policy Center (eppc.org) and is a visiting fellow at the American Enterprise Institute (aei.org), both of which are based in Washington, D.C. Yuval Levin is a fellow at the Ethics and Public Policy Center and is editor of National Affairs, whose editorial offices are in Washington, D.C. (nationalaffairs.com). This commentary originally was published in the Wall Street Journal.

Tags: opinion, editorials, health, politics, money, wisconsin