A day after Carolina Journal Online reported that N.C. Gov.-elect Pat McCrory has not signaled whether he will move forward with a health insurance exchange tied to Obamacare, National Review‘s editors have urged all states to resist the idea.
Backers of Obamacare want state governments to create exchanges. They note that the federal government will step in and create the exchanges itself if states refuse to comply. Some state leaders, believing resistance to the law to be futile and seeking what control they can exercise over health policy in their states, are tempted to give in.
But those leaders are in error. For one thing, ACA regulations are so byzantine and intrusive that they will prevent the states from exerting any meaningful control over the structure or operation of the exchanges. They will be state exchanges in name only. Even the best-intentioned state leaders seeking to ensure that the exchanges are cost-effective and that they serve their customers in a responsible and conscientious fashion will have little or no practical authority to do so. They certainly will have no power to mitigate the law’s trampling of religious liberties and individual consciences. Second, Congress has to its credit declined to appropriate any money for the federal government to create these exchanges, leaving the Obama administration without sufficient resources to implement its threat to create exchanges itself in recalcitrant states.
A critical related question — which will almost certainly be decided in court — is whether the federal government has the legal authority to offer Obamacare subsidies to customers of exchanges created by the federal government rather than by the states. This is important because those exchanges simply will not be economically viable without those deficit-exploding subsidies, which will add the better part of a trillion dollars to the national debt over the next decade, and perhaps more. The law as written authorizes the subsidies for customers of state-created exchanges but offers no similar authorization for the federally created exchanges.