News Story

Rejecting Obamacare: Why the Legislature Defunded the State Health Exchange

In an end of the year analysis of Michigan Governor Rick Snyder, the Associated Press states that one of the political “misses” of Snyder’s first year was he “failed to get the GOP-led House to approve spending federal dollars to develop a state health exchange where individuals and small businesses could shop for health insurance.”

Although the AP considers it a failure for the Snyder Administration, many limited-government proponents believe that it is a good thing the exchange was not created.

Health care exchanges are health care plans regulated by a state where residents can purchase health insurance.

Jack McHugh, legislative analyst for the Mackinac Center for Public Policy, said the federal government can create the health care exchanges if states fail to do so. The exchanges are the instruments for which Obamacare’s subsidies will be distributed, McHugh said.

“Governors and state legislators have a duty to push back against his infringement of Federalism,” McHugh said. “States have a duty to push back when the Feds overreach, it is more than a political statement. It is a constitutional statement. They are saying, ‘Feds – you went too far. And we aren’t going to roll over and just take it.’ ”

Michael Cannon of the Cato Institute laid out why states should not implement health care exchanges in Sept. 15 testimony to the Missouri State Senate.

The state would have enormous responsibilities in being a watchdog over the health insurance carriers and running a “reinsurance program” and a “risk-adjustment” program, Cannon said. “The states don’t have the time to take on all the responsibilities involved in creating the exchange."

Cannon argues that states don’t have the money to spend on new bureaucracies.

“Every dollar that Missouri spends on an exchange is a dollar it cannot spend on roads, education, or police — or more important, a missed opportunity to spur economic recovery by reducing the tax burden,” Cannon told the committee.

He also said it made little sense to create a new government bureaucracy for a law that could soon be repealed. The United States Supreme Court has stated it will rule on the constitutionality of Obamacare.

Cannon believes that state officials who set up health care exchanges are setting themselves up to take the blame when Obamacare fails.


See also:

Ten Reasons to Reject State Obamacare Exchange

Obamacare Exchange Money Stripped From Appropriation Bill

Commentary: Obamacare Arrives

Obamacare 'Exchange' Oppose of 'Free Market'

Obamacare: GOP 'Hostage Taker' 

Creating Health 'Exchange' Entrenches Obamacare

Obamacare Exchange: The People or the Insurers?

 Gov. Snyder’s 'Exchange' an Obamacare Trojan Horse?