Patterson: State leaders should refuse to allow Obamacare to localize - East Valley Tribune: Columnists

Patterson: State leaders should refuse to allow Obamacare to localize

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East Valley resident Tom Patterson ( is a retired physician and former state senator.

Posted: Sunday, July 15, 2012 8:04 am | Updated: 8:14 am, Thu Jul 19, 2012.

The fate of the Affordable Care Act (Obamacare) will be determined within the next few months. We’ll soon know if America will be saddled permanently with an unaffordable, unworkable, unpopular entitlement when we can least afford it.

The most important thing states can do to thwart Obamacare is to refuse to establish state-level health insurance exchanges. The Obama administration has repeatedly emphasized that establishing exchanges is critical to implementation of the law. Exchanges are government sanctioned cartels where only government approved insurers can sell government approved insurance including all subsidies, exemptions and mandates that they apply. In states that decline to operate an exchange, the federal government may establish one.

The sides are lining up. Strong governors like Christie (New Jersey), Daniel (Indiana), Scott (Florida) and Perry (Texas) have adamantly refused to allow Obamacare a beachhead in their states. They will not create an exchange. On the other hand, governors like O’Malley (Maryland) and Brown (California) are among those who boast of the great benefits that cooperation with Obamacare will bring to their states.

It’s time for Gov. Brewer and the Arizona Legislature to decide where they stand.

It’s disappointing that a strong states-rights advocate like Jan Brewer has even considered creating an exchange. There’s no question that this is a tangible erosion of Arizona’s Tenth Amendment sovereignty.

By bowing to federal government pressure to establish an exchange, Arizona would agree to operate a massive government program of dubious constitutionality. It would be run according to federal rules and mandates. The feds would control the doctors and providers allowed, the health insurance plans and benefits, the subsidies and exemptions. We would do their work, obey their rules and bear the cost.

In fact, it’s even worse than that. Arizona would be responsible for enforcing the individual mandate. We would be required to give the U.S. Treasury the names and taxpayer identification numbers of people who have changed employers and lost coverage as well as those who terminated their coverage or simply chose not to purchase insurance. We would be the IRS enforcer. Why would we do that?

Arizona’s health insurers and hospitals are applying the pressure to comply. They argue that if we control our own exchange, we would be able to create a more Arizona-friendly insurance system. Unfortunately, that’s not the way the law reads.

Arizona’s exchange would operate under rules as prescribed by the Health and

HumanServices Secretary. Any state law would be valid only if it didn’t conflict with federal laws. In practice, that means we could add mandates and subsidies if we wish, but not reduce any of those already in federal law. So we could make health insurance more regulated and expensive but not less so.

It is beyond obvious that the global cost of health insurance is about to skyrocket and millions of people will be forced into the exchanges. The pressure for further subsidies and exemptions for favored groups will be enormous. We would be better off not even having those options on the table.

Then there’s the matter of cost. The federal government will fund the operating expenses – until 2014. It’s kind of comical, like cell phone marketers who offer six “free” months if you commit to the plan. Nobody knows what it would cost to operate a health insurance exchange – maybe up to $100 million annually – but we would be nuts to commit to this unnecessary open-ended expense. Once we sign on, it’s our baby.

Finally, in the 2000-plus pages of legislation that nobody read at the time of Obamacare’s passage, there was a “glitch” that makes states’ decisions even more consequential. The law reads that “premium assistance” – subsidies to hide the law’s true costs – are available only to state-run exchanges, not federal ones. However, employers are charged penalties when their employees receive premium assistance, so under an Arizona-run exchange, employers would be subject to unspecified financial damages that couldn’t be levied under a federally-run exchange. We could protect our state’s businesses and block federal spending all in one motion.

But here’s what matters most. You can’t be on the Repeal and Replace team if you are implementing Obamacare at the same time. It’s time for choosing.

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