A news service for the people of Michigan from the Mackinac Center for Public Policy

A vote to report a state Obamacare exchange bill out of the Michigan House Health Policy Committee came up short yesterday, with only two Republicans supporting it (Committee Chair Rep. Gail Haines of Waterford and Rep. Mike Callton of Nashville).

Following the vote, House Speaker Jase Bolger, R-Marshall, declared the state-run exchange dead, saying:

“…After due diligence, however, it is clear that there were too many unanswered questions for the committee to feel comfortable with a state-run exchange and we will not have one in Michigan… The committee apparently was not able to get the answers to key questions or receive assurances about major concerns regarding costs for Michigan taxpayers, the ability to adopt a model the federal government wouldn’t ultimately control or the ability to protect religious freedom for Michigan citizens.”

This vote clears the way for Gov. Rick Snyder to proceed on negotiations with the feds over so-called “partnership” exchange, which essentially would leave the federal government in charge of administering Obamacare’s massive subsidy regime, while possibly giving the state control over some ancillary functions.

As described here previously, this is not as bad as a state exchange and may reduce some of the risks of a un-mediated federal exchange.

House members have been influenced by a string of similar decisions in recent weeks by other state leaders around the country who have refused to become “fall guys” for Obamacare’s coming disappointments. The most recent came from Arizona Gov. Jan Brewer on Wednesday, who accompanied her "just say no" letter to the feds with the following statement:

Today, I notified the U.S. Department of Health and Human Services (HHS) that the State of Arizona will not create a state-based Health Exchange. This decision comes following an extensive research and outreach process during which my team of health advisors conducted public hearings and met with HHS, patient advocates and representatives of Arizona hospitals, health providers, insurers, tribal groups and other members of the health care community.

This has been one of the more difficult decisions of my career in public service. My opposition to the Affordable Care Act (ACA) is unwavering, as is my belief that it should be repealed and replaced with legislation that achieves its stated goals: to improve access to quality, affordable health care in this country. But I am also aware that the ACA remains the law of the land. Likewise, though I am a steady advocate of local control, I have come to the conclusion that the State of Arizona would wield little actual authority over its ‘state’ Exchange. The federal government would maintain oversight and control over virtually every aspect of our Exchange, limiting our ability to meet the unique needs of Arizonans and the Arizona insurance market.

A state Exchange would be costly. Though the federal government has pledged to pay nearly all startup costs, states that form their own health exchanges are on the hook for operational expenses beginning in 2015. Those costs could total $27 million to $40 million annually for the State of Arizona, according to a recent study conducted by Mercer. Of course, these expenses would be passed along in the form of fees resulting in higher health premiums for Arizona families and small businesses. This would be an additional financial burden at a time when so many Arizonans are still struggling.

Lastly, there simply remains too much we don’t know about how a State-based Exchange would function and its ultimate cost to taxpayers. Without clear federal guidance and instruction, I cannot in good conscience commit the taxpayers of my state to this costly endeavor.”

In this premiere episode of EconPop, Andrew discusses the economics of Academy Award winner Dallas Buyers Club. Subjects include public health and safety regulations, crony capitalism and the role of regulatory capture, the emergence of black and grey markets, and commercial exchange as a means for increased social tolerance.

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