Oh, and about that state Medicaid waiver…
In the midst of the flurry of attention in the press and blogosphere given to the commerce clause vs. penalty/tax controversy in the SCOTUS decision on Obamacare, I began to wonder whether it was possible that the Medicaid part of the ruling, which was given relatively scant scrutiny in comparison, would turn out to be a sort of sleeper cell that could ultimately doom the whole Obamacare endeavor.
It turns out that might be the case, according to Michael D. Tanner of the Cato Institute:
So what will state legislators do now?
If they agree to expand their Medicaid programs anyway, they’ll be choosing to pile new costs on their state budgets and new taxes on their constituents.
And if a state doesn’t expand its Medicaid program, most of those who would’ve been eligible for Medicaid will now become eligible for subsidies through ObamaCare’s health-insurance exchanges. And those subsidies are paid in full by the feds…
Of course, if states do shift those costs back to the feds, that will cause the federal cost of ObamaCare to skyrocket. If every state were to refuse to expand its Medicaid program, the feds would save roughly $130 billion in their share of Medicaid costs in 2014, but would have to pay $230 billion more in new exchange-based subsidies ”” for a net added cost of $100 billion. And that’s just for the first year.
Remember, this is a law that already will cost as much as $2.7 trillion from 2014 to 2024, and will add more than $823 billion to the federal deficit ”” estimates that assumed state taxpayers would be picking up some Medicaid costs. How will Congress react if billions or perhaps trillions of dollars in new costs are added to the federal budget?
Here’s another complicating factor: Most states have not yet set up an exchange. Many, especially ones with Republican governors or legislatures, may refuse altogether. By most estimates, as few as 15 states are likely to have exchanges in operation by the 2014 deadline.
ObamaCare gives the feds the authority to step in, setting up and operating an exchange in any state that doesn’t set up its own ”” but there is reason to doubt that they have resources to do so in so many states.
Anyway, federal subsidies are available only through exchanges that the states set up. The feds can’t offer subsidies through a federally run exchange.
Thus, if states neither expanded Medicaid nor set up exchanges, that would effectively block most of ObamaCare’s new entitlement spending.
I wonder whether anyone thought this stuff through beforehand.
I don’t think anyone really expected SCOTUS to rule the way it did on the states, even though that portion of the decision was one on which even some of the liberal justices concurred (I believe the vote was 7-2 on that section). But even if politicians and tacticians on the far left didn’t see this exact thing coming (and I don’t think they did), my strong suspicion is that they didn’t really care all that deeply if the Obamacare legislation ran into big trouble, because that would help pave the way for their preferred solution and ultimate goal, single-payer.
[Hat tip: Althouse.]
EXCELLENT and very useful post, N-Neocon. Thanks!!
So the next question is: Did Chief Justice Roberts see this issue and if so was his decision made with such in mind? For better or worse, I think that Roberts evinced the beliefs of the left that The Court IS politicized, although just not in the way they expected.
Pure speculation, I know. Still, I am bothered by the conundrum that, on the one hand, the ACA decision would have been made for other than purely legal considerations but, on the other, that it is naive to believe that any court operates in a pure vacuum.
The individual mandate can only be applied through an exchange set up by the states. It cannot be applied through an exchange set up by the federal gov’t. So, there goes the individual mandate, at least in all those states that refuse to set up their own exchange.
Here’s another post by M. Tanner which expands and clarifies on his above post:
http://beforeitsnews.com/story/2350/111/The_States_Resist_Obamacare_by_Michael_D._Tanner.html
Now what for those states that refuse to set up their own exchange? The feds threaten to rewrite the legislation to remove the loophole which would lead to a fresh constitutional challenge and another look at whether or not the mandate is a penalty or a tax.
Andrew McCarthy cites United States v Butler. This case has some great language upholding the general idea that taxation must benefit everyone and must raise revenue within the expression of an enumerated power. All else shall be left to the States sovereignty.
http://www.law.cornell.edu/supct/html/historics/USSC_CR_0297_0001_ZS.html
See especially paragraphs 2, 9-11, 13; and after “Held” 4, 9, and 12.
Note also the seeming contradiction between paragraph 15 and the result which limits the application of the General Welfare Clause.
15. The power to tax and spend is a separate and distinct power; its exercise is not confined to the fields committed to Congress by the other enumerated grants of power, but it is limited by the requirement that it shall be exercised to provide for the general welfare of the United States.
The answer is that a tax to provide for the general welfare of the United States must also not invade the reserved powers of the States. Those powers are all powers not enumerated. Health Care is not an enumerated power. Therefore, by definition that a federal tax must accomplish the end of raising revenue for not only the general population but for fields withing the powers enumerated, anything doing different is not a tax.
The interstate exchanges may be one of the few things I really like about the law. The states are restraining interstate commerce by setting up little healthcare fiefdoms. Can you think of another product that isn’t allowed to be sold across state lines? So the federal government has the right to step in and regulate that interstate trade; it has the right and ability to require states to accept outside insurance, while still adhering to the state’s requirements for minimum coverage.
I don’t understand why the Republican governors would refuse to institute the exchanges, other than it is yet another unfunded mandate. Really the Federal government itself should either a) set up the exchange or b) just simply require insurance companies to sell in any state (we don’t need an interstate exchange for fruit or televisions.)
What a tangled web we weave when we attempt to decieve. Pelosi: “We have to pass the bill so that you can find out what is in it.” Too bad the supremes were not mandated to read and parse all 2,000+ pages. Obamacare is the new synonym for fluster cuck. Bring on the turmoil and law suits, may 10,000 lawyers rush in.
The Ryan Roadmap does that, Holmes:
Interstate Purchasing. Currently, individuals and families can purchase health insurance only in the States in which they live, because insurance companies are prohibited from selling polices outside their respective States. Thus the consumer is prevented from purchasing coverage from another State that might offer more suitable, or more affordable, coverage.
This proposal breaks the lock, allowing each individual to use the refundable tax credit toward the purchase of health insurance in any State. This will greatly expand the choices of coverage available to the consumer, and also will encourage broader competition and diversity among insurers, who will be able to sell their policies to individuals and families in every State, as other companies do in other sectors of the economy. After analyzing Federal Employee Health Benefits Program [FEHBP] preferred provider organization [PPO] prices, the Government Accountability Office reports: “We found that FEHBP PPO hospital prices differed by 259 percent and physician prices differed by about 100 percent across metropolitan areas in the United States, after we removed the geographic variation associated with the costs of doing business such as rents and salaries, and differences in the types of services provided.”
Allowing consumers to shop across State lines will balance State regulation of health insurance. Individuals no longer will have to pay for health benefits mandated by their home States that they do not need; they will be able to choose policies from States whose mandates better fit their personal circumstances. States will then have an incentive to balance their insurance mandates against costs to remain competitive with other States.
See:
http://roadmap.republicans.budget.house.gov/plan/default.aspx#Healthsecurity
click on “Health Care Security and scroll a couple pages.
There is another hurdle that Obamacare must pass. It will require complex computer systems to support the exchanges and there is no time to develop them. I’m a software architect in a major healthcare organization. I’ve been working with one system, among dozens, since 1998. As a system of record, our system feeds multiple down stream systems. This is not easy, because each system has its own set of conventions on how to represent health information. Obamacare faces challenges two orders of magnitude more complex than we’ve dealt with over many years.
I blogged about the issue here.
Wow. No doctors. No IT. No mandate. And all this:
http://www.weeklystandard.com/blogs/morning-jay-dont-bet-obamacare_648166.html?nopager=1
Curtis,
Thanks for the link to the WS article. Again, what a tangled web we weave when we practice to deceive.
Pat,
My wife is an IT person, she voiced the same reservations.
Side note: its still 94 degrees at 8:30 pm in SE Iowa. I don’t need Obamacare, I need a Canadian cold front to swoop down and make thunderstorms that rain, rain, rain.
Curtis: thanks. Good info.
Nature’s first green is gold,
Her hardest hue to hold.
Her early leaf’s a flower;
But only so an hour.
Then leaf subsides to leaf.
So Eden sank to grief,
So dawn goes down to day.
Nothing gold can stay.
Nothing gold, nothing gray
will make a feeling stay.
To realize the power
notwithstanding the hour
your hand you must make hold
Nature’s first green that’s gold.
http://www.youtube.com/watch?v=8xk1P1913y0