In January, U.S. District Judge Roger Vinson ruled in favor of Georgia and 25 other states that the federal health reform law was unconstitutional. Last December, U.S. District Judge Henry Hudson made a similar decision in a lawsuit brought by Virginia.
The elected branches also are doing their part to undo this federal takeover of Americans access to medical care. The U.S. House of Representatives has voted to repeal the legislation, and many states are refusing to collaborate. Obamacares survival looks increasingly doubtful.
Unfortunately, Gov. Nathan Deal appears ready to snatch defeat from the jaws of victory, stating, Well be required to move forward until such time relief is granted or an appellate decision is finalized.
On the contrary, Deal should avoid wasting state tax dollars doing the reform laws dirty work and decline to establish the health benefits exchanges proposed by the new law.
Some believe that a state can design an exchange that increases consumer choice. Two states, Massachusetts and Utah, already have exchanges.
Some claim that the Utah Health Exchange is a consumer-friendly model that can blunt the most harmful consequences of the Affordable Care Act. But Utahs exchange has been a disappointment. Although 20 businesses enrolled on its first day of operations in August 2009, only 13 remained enrolled by the end of 2009. As a result, the exchange is being re-launched with new rules this year.
Knowing that many states, including Georgia, are under Republican single-party rule, certain business interests are making unlikely arguments in favor of exchanges. These interests include IT vendors and consultants, health insurers who believe that they can dominate an exchange to the detriment of smaller competitors, and brokers who hope to get paid by the government to serve as navigators in the exchanges.
Some lobbyists claim that states can drop out of Medicaid and drive all of their former dependents into exchanges, where they will enjoy budget-busting federal tax credits. Even if this were possible, simply exploiting health care reform to transfer liabilities to the federal government hardly solves the national challenge of out-of-control health care spending.
Appealing to conservative sentiments, lobbyists also warn that if states dont establish their own exchanges by January 2013, the federal government will do it for them. This is highly unlikely. U.S. Secretary of Health & Human Services Kathleen Sebelius already has missed many deadlines prescribed by the legislation.
The greater risk is that Georgia would establish an exchange that it believes blunts the worst effects of the federal takeover. Given the Affordable Care Acts unpopularity, Sebelius is likely to approve exchanges for the short term, making the act appear less harmful than it really is.
Georgia also would find that an exchange is very expensive to operate. Massachusettss Commonwealth Connector spent more than $26 million on vendors and contractors in 2009 and $3.4 million on employee compensation. This makes up 3.5 percent of the money that businesses and enrollees paid into the exchange on top of the bloated administrative costs that already exist in health insurance.
By establishing an exchange, Georgia is making a one-way, lose-lose bet. If the federal takeover survives, the exchange will become a bloated administrative nightmare. If it is defeated, Georgia will have wasted time and energy that should have been directed toward that effort.
Deal should keep fighting it both inside and outside the courts.
John R. Graham is director of Health Care Studies at the Pacific Research Institute.
NO: Flexibility and funding will help states tailor programs to their needs.
By Kathleen Sebelius
As governor of Kansas, I saw up close the urgent need for health care reform. I heard it when factory owners told me their biggest concern was not manufacturing costs but rising insurance premiums, and when families said they felt like hostages to insurance companies that could deny or cancel coverage with little accountability. I saw it in our state budget, where rising health care costs prevented investments in our future.
The Affordable Care Act puts states in the drivers seat because they often understand their health needs better than anyone else and that is why it is so frustrating to hear opponents of reform falsely attack the law as nationalized health care. The truth is that states arent just participating in implementation of the law; theyre leading it.
Consider the state-based health insurance exchanges that will allow individuals and small-business owners to pool their purchasing power to negotiate lower rates. Theyll also serve as a one-stop shop where insurers must compete to deliver the best deal. Starting in 2014, members of Congress also will have to purchase health coverage through them.
Although the law gives states the option to design and run their own exchanges, some critics have claimed this could burden states if theyre not given adequate flexibility.
I agree. But what these critics miss is that the law already gives states most of the flexibility theyre asking for.
States have discretion, for example, to offer a wide variety of plans through their exchanges, including those that feature health savings accounts. Utah and Massachusetts already operate exchanges but take very different approaches: Utah allows all insurers to participate; Massachusetts has stricter standards. Under the law, both approaches could work.
States also have the flexibility to decide what benefits plans must offer. They can choose to require basic protections, based on the typical benefits people get through their jobs, or set higher standards.
And states costs of designing their exchanges will be fully funded by the federal government through 2015, with funds available to help determine which residents are eligible.
Some critics have said there has not been enough analysis of how exchanges would affect employer-based insurance. But the nonpartisan Congressional Budget Office, or CBO, has closely studied this and estimated that only 24 million Americans will be insured through these exchanges in 2019, compared with 162 million covered through the workplace.
The Affordable Care Act gives states freedom to tailor reforms to their needs. The one thing the law does not permit is going back to the broken health insurance system we had a year ago.
Since the law was passed last March, our department has worked with states to keep premiums down, hold insurers accountable and give Americans more freedom in their health care choices. Americans have gained the protection of a Patients Bill of Rights that outlaws many of the insurance industrys worst practices. After years of decline, the number of small businesses offering health coverage is ticking up, partly because of tax credits available under the law. And the CBO has said that the law will reduce the deficit by $230 billion during the next 10 years.
I look forward to working with governors to build on these achievements. States are the laboratories of our democracy, and I will continue to welcome their ideas about how to improve the law or implement it more effectively. What we cannot do is allow this progress to be blocked or reversed by overheated rhetoric about a government takeover of health care a claim that has now been so thoroughly debunked that it was named PolitiFacts 2010 lie of the year.