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  • Side Effects: States Will Feel the Effects of Obamacare

    The national health reform rammed through Congress is giving state officials headaches. Writing in The Wall Street Journal, Indiana Governor Mitch Daniels outlines several problems states will have to deal with as a result of Obamacare.

    For example, Daniels now faces the prospect of terminating a popular insurance program for low-income Indiana residents. The “Healthy Indiana Plan” includes health savings accounts that have been widely popular with the program’s participants. Due to new health care law, however, Indiana will most likely have to dump the “Healthy Indiana” enrollees into Medicaid.

    Moreover, the Legislature will probably have to hike state taxes. Though federal funds will cover–initially—the medical cost of expanding Medicaid rolls, the states must cover the additional administrative costs. And the feds won’t cover the extra health costs forever. In later years, states have to pick up the tab of expanding benefits as well. At the end of the day, the Medicaid expansion will prove far more costly than “Healthy Indiana.”

    Daniels also notes that states must now weigh the possibility of dropping insurance coverage for their employees. It might be much cheaper just to pay the new federal penalty for not offering insurance, and letting state government workers use lavish federal subsidies to buy individual or family coverage in the new exchange. A Heritage analysis shows that’s one way private companies with a high proportion of insured, low-income workers can cut operating costs. It might work for some state governments, too.

    Of course, when state governments save in that way, others pay. Hoosier taxpayers would wind up paying the penalty imposed on the state government not complying with the law’s employer mandate. And federal taxpayers would pick up the tab for the subsidies given to help state workers buy coverage in the exchange.

    The unintended consequences of Obamacare outlined by Gov. Daniels demonstrate why we would have been better off letting the states take the lead in reforming the health insurance market. A federalist approach allows states to adopt reforms that best suit the needs and desires of their residents.

    To learn more about successful state health care reform, click here.

    Posted in Obamacare [slideshow_deploy]

    13 Responses to Side Effects: States Will Feel the Effects of Obamacare

    1. Pingback: State News Shot » States Will Feel Effects of Obamacare

    2. Bilie says:

      This is what happens when people freely give up their will to live up to their personal responsibilities to themselves. Government run health care is no where in the Constitution. People have to have the same interpretation of the Constitution. It was GOVERNMENT that imposed the ss insurance that was suppose to be temporary.

      Get rid of all government run health care BS, except those for the sole benefit of the elderly and military. Everyone else is big enough to take care of themselves using their freedom and brains, Mr. President.

    3. Pingback: Obamacare: States: Taxes: Ugly | Clarion Advisory

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    5. Pingback: Liberal Health Care Like a Prison Shank Doubling as a Tongue Depressor. « DouglasernstYLP

    6. Carrie, Virginia says:

      Borders without boundaries seems to be the montra in DC. If this administration doesn't like the line between states rights and their Federal desires, they simply move the line. Bankrupting state budgets thru healthcare is simply a catalyst to 'the greater need to feed the beast.' However, I am confident that America is great because we have faced the darkness before and snatched the preservation of our freedom from the jaws of those who want to bring America down.

    7. Pingback: States problems with ObamaCare

    8. Pingback: Predicting Outcomes | Go HealthReform

    9. pat duran Texas says:

      The Obama care fiasco is the beginning of the perpetual nightmare he and his Chicago group have started. I am 3 years out from retirement at age 60 and I have health insurance. People in the baby boomer range have a lot to think about on health care/retirement. It is also called Vote in November '10.

    10. Pingback: Must Know Headlines 4.10.2010 — ExposeTheMedia.com

    11. Charles R. Williams, says:

      States cannot be compelled to participate in Medicaid. Some states may choose to drop out and fund medical care for the poor directly. They could open bare-bones public health clinics with immunity from malpractice lawsuits to serve healthy people and with case managers to direct the expensively sick into the insurance exchange system. These low income people who are sick would be entitled to large subsidies from the feds and the states could pick up the tab for the difference.

      I'm sure there are a hundred other ways the states and individuals can game the system.

      Unless the subsidies are huge people will drop out of the insurance exchanges until they get sick. Eventually, the number of uninsured will explode as will the cost of insurance. Some people will opt to pay the penalties (provided they're enforced) and buy catastrophic coverage outside of the insurance exchanges (assuming that's allowed).

    12. Pingback: Michelle Malkin » Torquemada Waxman is still watching you

    13. Pingback: Right-Wing Links (April 8, 2010)

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