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Tags: health | exchanges | obamacare | christie | perry | states

Obamacare Gets Stunning Rebuke from 25 States

By    |   Sunday, 16 December 2012 06:41 PM EST

Dec. 14 has come and gone, and President Obama's Patient Protection and Affordable Care Act — better known as Obamacare — has received a stunning blow.

State governments had until Dec. 14 to decide whether they would build their own health-insurance exchanges, online services that allow individuals to purchase private health insurance if it wasn't provided by their employers.

The exchanges now have been rebuked by half the states, which have refused to participate in this critical component of Obamacare.

Their refusal won't stop exchanges in their states. Under the law, states that don't create an exchange can have the federal government deal with this expensive task.

Editor’s Note: New 'Obamacare Survival Guide' Reveals Dangers Ahead for Your Healthcare
Only 18 states and the District of Columbia have agreed to build and manage their own exchanges. Seven others have taken a middle course and will partner with the federal government to create their exchanges.

Why have so many states opted out when it comes to the exchanges? Part of the reason undoubtedly is political.

Most of the states carried by Mitt Romney in the Nov. 6 election are those now refusing to build their own exchanges. That is no coincidence. These are states with populations that, generally speaking, would vote by clear majorities to repeal Obamacare if they were permitted to do so.

The elected governments in these states were plainly listening to their citizens when they decided to say no to a state-run health-insurance exchange.

But there’s more to the story. A number of states that voted for President Obama — notably Florida, Pennsylvania, Wisconsin, Virginia, New Jersey, Ohio, and New Hampshire — also have said no to an exchange. While politics may have played a role in those decisions, other factors came into play.

On "The Daily Show With Jon Stewart," New Jersey Gov. Chris Christie  explained why he vetoed a state-run exchange: “I’m asking (the Obama administration) a bunch of questions about how much this is going to cost and everything else, and they won’t answer my questions . . . I’m not going to do this now . . . The law permits you always to change back to a state exchange if you want to. And what I’ve said to them is . . . if you can’t give me all the information, you run it.”

Texas Gov. Rick Perry, who also nixed his state creating an exchange, echoed a similar sentiment earlier this month.

"The idea that you’ve got a state-instituted exchange, but it has to be federally approved. So the fact is the federal government’s going to have to run these," Perry said. "And they don’t have the expertise, nor do they have the money."

Perry predicted the implementation of Obamacare is "going to be a disaster."

Whatever the reason behind the decision of 25 states to opt out of building and managing an exchange, a large challenge now confronts the Obama administration.

The authors of Obamacare did not anticipate this level of non-participation by the states — as shown by the absence of specific language in the law to address the possibility — but now the federal government will be forced to build and manage exchanges for half the states.

If the White House is unable to rise to this unexpected challenge, it could mean that some of the states which opted out will not have an exchange in place by Oct. 1, 2013, the deadline for all exchanges to be operational.

While the federal government has the financial means to build out the exchange infrastructure where it needs to, it may have difficulties managing the health-insurance landscape in individual states, given the labyrinth of mandates and regulations that separate one state from another.

Another potential problem looms on the horizon thanks to a mistake in how the Obamacare law was written by Congress.

The specific language of the law says that a health-insurance exchange run by a state is eligible to receive subsidies from the federal government, but it does not explicitly say that an exchange run by the Department of Health and Human Services is eligible to receive the same money.

For now, the Internal Revenue Service is ignoring this inconsistency, but someone eventually may mount a legal challenge over the issue, leaving the matter for the courts to decide.

Editor’s Note: New 'Obamacare Survival Guide' Reveals Dangers Ahead for Your Healthcare
But the uncertainty of the exchanges inevitably will raise the question of whether Obamacare can be fully implemented, especially by 2014 when the individual mandate requires every citizens to have private health insurance or pay a fine.

Since Obama signed the sweeping legislation on March 23, 2010, its sustainability has experienced a rollercoaster of ups and downs.

With a little more than half of Americans consistently opposed to it since then, Obama’s greatest legislative achievement nonetheless has endured, surviving a controversial Supreme Court decision that could have cut the legs out from under it and a national election that could have elevated Mitt Romney to the White House along with his promise to block the law’s implementation.

With these large judicial and electoral hurdles overcome, Obamacare now is  moving full-steam-ahead towards Jan. 1, 2014, when most of its most important provisions go into effect.

All, however, is not smooth sailing, with resistance remaining in numerous states. The controversy surrounding the creation and management of the new health-insurance exchanges highlights like nothing else this persistent opposition.

Health-insurance exchanges represent the vital central nervous system of Obamacare. Once they are up and running, Americans will be able to go to a website and select an insurance plan that meets their individual needs from a menu of coverage options.

The plans will be regulated, each required to provide so-called “Essential Health Benefits.” The exchanges, by definition, are online marketplaces for health insurance, but they also are structural magnets that will help integrate the many different components of Obamacare together. 

Editor’s Note: New 'Obamacare Survival Guide' Reveals Dangers Ahead for Your Healthcare

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December 14 has come and gone and President Obama'sPatient Protection and Affordable Care Act better knownas Obamacare has received a stunning blow. State governments had until December 14, 2012 to decide whether or not they would build their own health insurance...
Sunday, 16 December 2012 06:41 PM
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