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  • Obamacare Insurance Exchanges: States Have Options

    Governor John Kasich (R) is expected to opt not to set up a state Obamacare exchange. This is the right decision for Ohio. The President’s health care law is unworkable and unsustainable. Rejecting the health insurance exchanges, and equally as important, the Medicaid expansion, are two opportunities states have to push back on this law and instead push forward on a better health reform agenda for Ohio.

    These exchanges are used in the law to funnel subsidies to government-controlled health plans. Some proponents of the law will undoubtedly criticize the Governor’s decision. But, there are more practical and sound reasons why opting not to adopt a state exchange is best for the states.

    First, under the exchange regulations promulgated by the Secretary of Health and Human Services (HHS), states would gain no meaningful flexibility or advantage by operating their own exchanges, relative to a federally facilitated exchange. They would simply be acting as vendors to HHS.

    Second, states still regulate insurers (including those participating in exchanges) in all matters not otherwise preempted by federal law, regardless of who operates the exchange. States can also regulate exchange “navigators” through state professional licensure statutes, to ensure equal standards/level playing field with other insurance producers, again, regardless of who operates the exchange.

    Third, electing to operate the exchange means that the state government is voluntarily taking responsibility for the results, along with the obligation to secure the necessary operational funding. While the Obama Administration is encouraging states to commit to establishing a state exchange, there are numerous, important details still unknown. Every day that goes by with no roll-out of these vital pieces by the Obama Administration further increases the probability that the Administration is not ready and will fail when the exchanges are expected to open in October.

    Fourth, a state that elects to let the federal government set up the exchange can—if it doesn’t like the results—set up a state exchange to replace the initial federal exchange later. There is no rush to commit.

    The next big decision for Governor Kasich will be whether he also rejects the Medicaid expansion. Here, too, there will be many who will try and argue why Medicaid expansion is a good idea. But the promises of no cost, more control, and helping those without health insurance fall flat. The Medicaid expansion will bring long-term costs to the states, offer no new flexibility to the existing Medicaid program, and create greater dependence on government-run health care rather than less.

    Health care reform is important, but recognizing a failing solution is even more important. Governor Kasich deserves tremendous credit for recognizing the shortfalls of the Obamacare exchanges and, hopefully, he will come to the same conclusion with the Medicaid expansion. Likewise, instead of acquiescing to a flawed law, states like Ohio can lead the way to the right health care solution.

    This blog originally appeared at The Buckeye Institute.

    Posted in Featured, Obamacare [slideshow_deploy]

    6 Responses to Obamacare Insurance Exchanges: States Have Options

    1. Miranda Hahn says:

      Geez, I hope Michigan goes this route. Not perfect, but better than the alternative. Would be better to remove the state and the employer from the employee-insurance relationship altogether.

    2. aed939 says:

      Here's some more options: set up an individual mandate penalty rebate fund. Pay for it with a contraception fee equal to a regular office visit and prescription copay. Then sue the federal government for violating the uniform provision of the tax powers–as penalty payers will be disproportionately found in rebate states vs. non-rebate states. They will have to adjust by paying a block grant (which can be funnelted right back into the rebate fund), or repeal the individual mandate.

    3. James says:

      Texas has already stated that they will not set up the health exchanges. The more the states refuse to follow this part of Obamacare or (Patient Affordable Health Care Act), the better. Hopefully it will lead to the collapse of this worthless bill and all of the multitude of regulations associated with it.

    4. Bobbie says:

      As a free individual living in America, I am emphatically opposed to government involvement in personal health care! Two options to pay. With or without insurance. This was falsely purposed being falsely executed based on a minority that will cost this country far more with it then without. It's our life and our responsibility to our freedom in America. The government is violating all of the above. Any government involvement is where freedom and ones own decisions, isn't. Repeal Obama care. It's an unaffordable act with high potential to fraud and corrupt as it's written causing more damage yesterday than productive anytime. It's demanding and punishing with rules and mandates without significant mention regarding the care itself. Force is cruel and unusual in American leadership. We said we don't want feds involved! Repeal Obamacare! It's impractical, unreasonable, dangerous and not trustworthy! Livelihoods in freedom are worth the total opposite of this communism in the make!

    5. Charie says:

      Gov. Walker has decided that Wisconsin will not set up a state-based healthcare exchange. I did all I could to help form that opinion and so did many others in this state.

      Why should the state have to set up anything that would make them responsible for all facets of the program? The way I figure it is that government moves so slow (as witness Benghazi. Information would have come faster by pony express) by the time they get around to setting up all these exchanges there will be no more money left to implement the plan.

      No more government interference in health care at all. No insurance for those who have their own insurance – only government (state) medical care for people who are unable to take care of themselves!!!!

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