If States choose not to set up Federal Exchanges, does Obamacare implode?
The pending challenges to the law, and related regulations, range from the Goldwater Institute's claim that it gives the Independent Payment Advisory Board unconstitutionally broad powers over Medicare services and payments, to the more than 35 lawsuits by religious employers attacking a Health and Human Services rule that requires them to provide their employees with insurance that covers women's contraceptives without a co-payment.
By far the broadest and potentially most damaging of the legal challenges turns on whether Congress intended that tax credits and subsidies to help consumers buy health insurance be available only through state-created exchanges. Many states are signaling that they may not create their own exchanges, leaving the federal government to do so, as the law requires.
If subsidies and tax credits aren't available in states with federally run exchanges, conservative legal scholars say, then two other lynchpins of the law would also be undermined: the requirements that employers of a certain size offer insurance and that most individuals buy insurance.
Supporters of the law scoff at the arguments, asserting that Congress clearly intended that the subsidies and credits would be available in all exchanges.
But, confident of their case, some health law opponents, including Jonathan Adler of Case Western Reserve Law School, Michael Cannon of the libertarian Cato Institute, and National Affairs editor Yuval Levin, are urging Republican-led governments to refuse to set up the online insurance purchasing exchanges, which would, as the argument goes, make their residents ineligible for the tax credits and subsidies. They say that this step also would gut the so-called employer mandate, which the law says will take effect in states where residents are eligible for such assistance.
The mandate requires employers with more than 50 full-time workers to offer health insurance policies for employees and their families that include a minimum set of benefits, or pay a tax of $2,000 per employee for failing to do so. The tax wouldn't apply to the first 30 workers.
Health law critics theorize that by refusing to set up exchanges, states could also carve a hole in the provision that requires individuals to either obtain insurance or pay a tax as a consequence of choosing not to, which the Supreme Court upheld in June. And if states could disable both the employer mandate and part of the individual mandate, they could wreak havoc with the law's overall operation.
It's a potential can of worms. A huge can. Think of the other lawsuits that would follow-I can easily see a Obamacare supporter in a non-exchange State suing the Governor of that State, for being denied a Federally-passed law. How does the State respond to that?
And if you think it's just a handful of Racist Governors denying their citizens coverage under Obamacare, think again. Only 17 States have set up exchanges at this time:
Health and Human Services Secretary Kathleen Sebelius pushed back the deadline until Dec. 14 for states to submit letters of intent to build the state-based markets, called exchanges. The original deadline had been Friday, Nov. 16.
"We are committed to providing states with the flexibility, resources and time they need to deliver the benefits of the health care law to the American people," Sebelius wrote Thursday to the Republican Governors Association (RGA). "We will continue to work directly with individual states to address their particular questions and concerns."
The letter was in response to an RGA request Wednesday to extend the deadlines until HHS publishes rules detailing how the exchanges would work. A slew of regulations are expected to be published in the next few weeks.
The markets are a key element of the health care law -- where millions of individuals are expected to shop for coverage and find out if they are eligible for government subsidies or Medicaid, the state-federal health insurance program for the poor. The law requires the federal government to build and operate the markets if states do not.
In a statement last night, the RGA thanked the agency for its response, but it was unclear whether the additional time would change anyone's mind. As of Thursday, only 17 states and the District of Columbia had committed to building their own exchanges -- far fewer than envisioned by the administration when the law was passed in 2010.
"Unexpected", for sure.
The most disgusting portion of this whole kerfuffle? This passage:
The administration and other advocates say that the 2,700-page law's language on the powers of federal exchanges clearly did not reflect the intent of Congress. That, they say, was to give federal exchanges all powers enjoyed by state exchanges, in keeping with the overarching purpose of making health insurance affordable for the vast majority of Americans.
Read that again. It says that the White House says the law Congress passed doesn't reflect the intent of what Congress wanted.
Unbelievable.
I know I'm going out on a limb here, but maybe if the legislation had been debated, discussed, tested, and maybe even read, some of these pitfalls could have been avoided.
