Obamacare in crisis as 2013 approaches
Two weeks ago, I tallied up the score in the state rebellion against ObamaCare. About half of the states have either forthrightly refused to set up their ObamaCare insurance exchanges, or opted for a state/federal “partnership” arrangement. Most of the 16 outright refusals have come from Republican governors, who generally cite three reasons for insisting that the federal government run its own ObamaCare exchanges in their states:
1. The governors don’t want to get saddled with the expense of setting up and running those exchanges.
2. The states feel that they would be very junior partners in the ObamaCare enterprise, without much in the way of local control, so the whole concept of a “state-run” exchange is really just a fig leaf of federalism for a monstrous central bureaucracy.
3. Perhaps the most damning indictment offered by the recalcitrant governors is that ObamaCare’s regulations are still largely unwritten. The governors felt they were being asked to sign a contract that still contained a shocking number of blank pages and penciled-in notes.
An article in The Hill on Sunday shed more light on point number 3. “The Obama administration faces major logistical and financial challenges in creating health insurance exchanges for states that have declined to set up their own systems,” noted author Elise Viebeck, who went on to say it was “a situation no one anticipated when the Affordable Care Act was written,” because “the law assumed states would create and operate their own exchanges, and set aside billions in grants for that purpose.”
What? “A situation no one anticipated?” How could that be true? The governors resisting President Obama’s health-care takeover are not seceding from the Union. “Rebellious” is a description of their attitude, not their legal status. They’re not breaking, or even challenging, any laws; they’re exercising a provision written into ObamaCare, and it’s one of the relatively few sections of that disastrous law that actually was written in ink, at the time of passage. State governors were always given the option of asking the federal government to run the exchanges in their states.
Is it possible that the power-hungry bureaucrats, clueless central planners, and back-room dealmakers who cooked up ObamaCare truly believed they would get nearly 100 percent compliance from state governors – many of whom were well-known limited-government Republicans – and didn’t really have a “Plan B” for dealing with a sizable number of governors exercising an option that was always present in the law? If that’s true, it’s another demonstration of the dangerous incompetence of ObamaCare’s authors and signatories.
The surprises just keep coming in the Hill article. Jennifer Tolbert, director of state health reform at the Kaiser Family Foundation, is quoted as saying, “You can’t simply deploy one federal exchange across the board. Each state is different – their eligibility systems are different, their insurance markets are different. [HHS is] going to have to build these exchanges to fit into the context of each state.”
You mean you can’t run the national health insurance system out of Washington? Now they tell us! Chalk up another win for ObamaCare’s critics!
Here’s a taste of how completely unprepared our new health-care commissars were for this entirely predictable turn of events:
Every state must have an exchange by Jan. 1, 2014, meaning HHS doesn’t have a lot of time to do a massive amount of work. The department could quickly run through a $1 billion fund designated for implementing the exchanges.
Experts have predicted that the department will soon have to tap budgets from its other programs to cover exchange costs. Other have said it might charge fees on the insurance purchased in its exchanges once they are launched.
And as it moves forward, the department will continue to deal with political battles. Speaker John Boehner (R-Ohio) on Wednesday said repealing Obama’s law should be one of the topics discussed in budget discussions in the lame-duck session.
The bitter irony is that all of this billion-dollar confusion is happening because ObamaCare seeks to replace far less expensive and more efficient market forces with one-size-fits-all mandates and central planning. The purpose of these health care exchanges is to create a titanic fifty-state bureaucracy that helps consumers find the best Washington-approved health care policies, and collect all of the tax credits owed them – a sort of “Match.com” for health insurance, as Viebeck describes it.
In other words, it’s a hideously expensive and clumsy replacement for market competition and advertising. Instead of allowing insurance companies to compete across state lines and win over customers with advertising – by far the most efficient way to educate consumers about the features and benefits of any product – we’ve got a red-tape nightmare machine that’s already running over budget and failing to meet deadlines, as the federal politicians who seized control of the health insurance market belatedly realize their arrogance in presuming to know local conditions better than the people who live there.
Imagine if, instead of ObamaCare, we had a market-friendly system that simply removed barriers to interstate competition and provided modest incentives to third-party companies to create these “Match.com for health insurance” websites. You’d probably be using them already, instead of listening to bureaucrats stammer about how they’ll need another billion dollars and a few extra years to set them up, because people who actually read the ObamaCare legislation decided to activate one of its countless provisions.
And this is only happening because ObamaCare is a gigantic fraud, not a properly-written piece of legislation. The “state exchanges” are an accounting trick designed to make ObamaCare look like less of a strain on the federal budget, shuffling billions of dollars in costs off Washington’s books and into state capitals. When ObamaCare’s inevitable fiscal collapse arrives, the states would be on the hook to serve as tax collectors to make up some of the shortfall. What reasonable governor wants to be part of that, especially when the option to create state exchanges later remains on the table? And the only reason a right of refusal was written into the state-exchange boondoggle was to make ObamaCare look less oppressive… a deceit that will become increasingly obvious as this misbegotten system continues its collapse, and the word “optional” is redacted from more of its pages.