State Exchanges – Is This Our Last Hope Against Obamacare?

On Thursday, Republican House Speaker John Boehner gave an interview with ABC News in which he famously declared, “Obamacare is the law of the land”.  But the battle as they say, has just begun.

FreedomWorks is leading that charge, taking action against the implementation of state-run health exchanges, and by extension, striking a critical blow against the heart of Obamacare.

With a Friday deadline looming, states are pressed with the task of determining whether or not to implement health insurance ‘exchanges’, a new government-run “marketplace” for obtaining health insurance.  These exchanges are designed for the management of billions of taxpayer dollars in insurance premium subsidies that are to be distributed to private insurance companies.

Noted health care policy critic Betsy McCaughey, explains it in layman’s terms:

“It’s like a supermarket that only sells cereal. The exchange will sell only the government-designed plan. In most states, exchanges will be an 800 number, a Web site and a government office, like the DMV.”

Michael Cannon, director of health policy studies at the Cato Institute, explains what that really translates to for residents of those states who choose to implement such an exchange.

“State-created exchanges mean higher taxes, fewer jobs, and less protection of religious freedom.”

Practically a microcosm of the entire Obama platform during his first term, and certainly representative of what the future holds should Obamacare indeed become the law of the land.

So how can we use state exchanges to fight the new health care law?  Do nothing.

Conservative radio host Rush Limbaugh stated that “there could be some delays if the governors refuse to set up the exchanges”, but simple delays could beget much larger problems for the health care overhaul. To understand this, it is necessary to understand why these exchanges need to be created in the first place.

The federal government has admitted that it can’t pay for this health care ‘marketplace’, which would cost between $10 to $100 million per year in each state. Hence the necessity for each state to set up its own exchange, shouldering some of the costs.

The problem with that notion is that nowhere in the 2,700 page behemoth known as the Affordable Care Act, is it written that the states will be required to do so; the assumption being that the states would simply go along with the federal governments wishes.  Because of this, the government cannot legally enforce the employer mandate “tax” on employers in a state that has not set up an exchange.  Without the employer mandate, and without the exchanges to manage the insurance subsidies, ObamaCare falls apart.

That said, there is recourse for the Obama administration, which they have indicated will be sought - implementing federal exchanges in states that do not set up their own.

This creates a two-headed issue, however.

First, a minor matter of money.  The bill itself does not budget any money to do the work for the state.  This as we mentioned would amount to anywhere between $10 to $100 million per year, per state.  A matter more of inconvenience, as the federal government will now have to find ways to obtain that money from other sources – and they will.

The second issue is one that FreedomWorks Vice President of Health Care Policy Dean Clancy believes is the key to nullifying Obamacare.  Essentially, when the federal government implements an exchange, attempting to distribute the subsidies and enforce the mandates in the resisting states – it would be illegal.  The states involved could then sue.

This alone will probably force Congress to reopen the health care law, opening up an opportunity to properly scrutinize Obamacare with Republicans in control of Congress this time around.

The simple equation for all of this is as follows:

No state exchanges = No mandates + No subsidies = Obamacare doesn’t work

In a July memorandum, Clancy lays out this simple path for the states to take in their battle against Obamacare:

  1. States that have begun to set up health exchanges should stop.
  2. States that have already approved legislation/funding for an exchange should rescind it.
  3. States that have been offered money for exchange implementation should refuse it.
  4. States that have received such money should, if possible, return it.

There’s still time.  And now, here’s what you can do.

First, take a look at this table which shows where each state stands regarding health care exchanges.  Currently, 14 states have chosen not to implement an exchange, while 17 others have taken no significant action or have been simply studying their options.  If a good portion of those 17 states were to refuse action, it would put a majority at odds with Obamacare, striking a devastating blow to the plan.

Second, the deadline for states to establish their own exchange is Friday, November 16th.  FreedomWorks is setting up state specific action pages for you.  These will be an invaluable resource for concerned citizens to contact their governor and/or leading state legislators to send them a message, to urge them to hold the line in rejecting state health care exchanges.  I have listed them below by state. Keep checking back on our Take Action page as more may be added in the near future.

In the end, Obamacare could possibly be nullified through all of our hard work, by making your voice heard in individual states, and through states taking action and fighting the federal government’s illegal distribution of subsidies and enforcement of mandates within their borders.

The irony however is that this all starts with inaction – the states must not implement these exchanges.  They must do nothing.

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