Tuesday’s election resulted in a resounding setback for the crown jewel of President Obama’s legislative agenda. Implementation of the Affordable Care Act (ACA) will suffer significant setbacks at the federal and state level. While Congress works towards repeal, states have to choose whether to enable or obstruct ObamaCare. Two states, Arizona and Oklahoma, voted in favor of a proposition that would make the individual health insurance mandate unconstitutional. Newly elected officeholders also have important roles in defeating ObamaCare.
If the new law takes full effect in 2014, 16 to 18 million more people will become dependent on Medicaid, the program for low-income Americans that is jointly financed by the federal and state governments. This influx will impose a huge burden on states’ finances. The law further requires increases to fees for Medicaid primary-care providers for 2013 and 2014.
Although the federal government promises to pay most of the money for this expansion, starting in 2014, it gradually drops as soon as 2016. The newly enlarged Medicaid will be so expensive that Ed Haislmaier of the Heritage Foundation and Dennis Smith (who used to run Medicaid’s federal office) have concluded that states’ best course of action under ObamaCare is to quit Medicaid and give up federal matching dollars entirely. Newly elected governors and legislators will have to master the finances and politics of Medicaid quickly in order to make effective decisions over the next few years to head off this new Medicaid monster.
The new health law presumes that states will establish “exchanges” that would choose health insurance for many of their residents. These exchanges will devour federal subsidies. Official sources estimate that about half a trillion federal dollars will flow into ObamaCare exchanges between 2014 and 2019, but these likely underestimate the true costs.
The Congressional Budget Office estimates that 24 million people will enter the exchanges in 2019, of which only 3 million will come from the 162 million who would have enjoyed employer-based benefits under the current system. The actual number will be far greater – maybe 35 million. Governors and legislators who collaborate and establish state-run exchanges will be forced to cough up tens of millions of dollars in annual administrative costs to IT vendors and consultants.
The alternative to such collaboration is to allow the federal government to operate the exchange and bear the full cost. Beyond the refusal to collaborate, governors and legislators can seize the initiative by passing the Freedom of Choice in Health Care Act, model legislation developed by the American Legislative Exchange Council. This is the amendment which just passed in Arizona and Oklahoma, which asserts the unconstitutionality of ObamaCare’s individual mandate to buy health insurance. The measure has been proposed in 42 states, and enacted in statute form by six — where governors signed the bills to wide-ranging applause.
Newly elected insurance commissioners will have to struggle against the Obamacrats in the federal government’s newly established Office of Consumer Information and Consumer Oversight. Never before has the federal government sought to micromanage any line of insurance as much as ObamaCare does health insurance. Even worse, the chief of this new bureaucracy, Jay Angoff, is a “class-action litigator who specialized in making big insurers pay out,” according to the Washington Post.
Fortunately, ObamaCare allows the National Association of Insurance Commissioners (NAIC) significant say in proposing the new rules to regulate private health insurance. Through the NAIC, insurance commissioners who want to preserve as much choice as possible for their states’ consumers and businesses will have a chance to protect them from the forthcoming regulatory tsunami.
Finally, newly elected attorneys-general can lead the fight against ObamaCare by suing the federal government on constitutional grounds. A full 21 states are already suing the federal government for this unprecedented intrusion into states’ and individuals’ rights. The most celebrated lawsuit is led by the attorney-general of Florida, and he’d surely welcome new plaintiffs.
Tuesday’s election dealt ObamaCare a serious blow. States’ newly elected leaders should continue the attack until victory is won.