Friday, November 16, 2012

Will the 30 Republican Governors Give Obamacare a Headache?

Byron York points out that since the November 6th election, Republican governors now control 30 states. This is up from 29 Republican governors in 2010. That control over 60% of the states may mean a headache for the roll out of Obamacare.
The flash point, at least right now, is Obamacare. People might assume the health care plan, passed by Congress, signed by the president and upheld by the Supreme Court, will now simply go into effect. It won't be that simple.

Obamacare directs states to establish exchanges through which uninsured people can purchase coverage. If the states don't do it, the law says the federal government will step in and set up an exchange itself. The Obama administration has been trying to push the governors to say whether they will set up exchanges in their states. So far, most of the Republican governors seem inclined to say no.

They have several reasons. One, they believe the exchanges will cost their states a lot of money. Two, they believe the federal government will exercise ultimate control, meaning there will be little benefit for a state to do the heavy lifting to get the exchanges started. And three, some suspect the exchanges will be a disorganized and troubled enterprise, and when the implementation of Obamacare comes under criticism, the blame will lie with the administration, and not the states.

Some conservatives are urging the governors not only to stay out of the exchanges but also to reject Obamacare's planned expansion of Medicaid. That could be a crippling blow to the health care law. "If enough states do so, Congress will have no choice but to reopen Obamacare," Cato Institute health care scholar Michael Cannon wrote in National Review Online recently. "With a GOP-controlled House, opponents will be in a much stronger position than they were when this harmful law was enacted."
[emphasis added]
If the Federal Government has to set up exchanges in more than half the states, that will take some big bucks. With the House of Representatives (where "all bills for raising revenue" must originate according to Article I, Section 7 of the Constitution) in Republican hands, lots of new funding for implementing Obamacare is not likely to happen.

A non-smooth roll out of Obamacare will be another indicator to the electorate already against it, that Obamacare is a legislative and medical fiasco.

Not only presidential but gubernatorial and legislative elections have consequences.

You can read Michael Cannon's article at National Review here. One very interesting point:
. . . [D]efaulting to a federal exchange exempts a state’s employers from the employer mandate — a tax of $2,000 per worker per year (the tax applies to companies with more than 50 employees, but for such companies that tax applies after the 30th employee, not the 50th). If all states did so, that would also exempt 18 million Americans from the individual mandate’s tax of $2,085 per family of four. Avoiding those taxes improves a state’s prospects for job creation, and protects the conscience rights of employers and individuals whom the Obama administration is forcing to purchase contraceptives coverage.

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