One More Reason Why States Should Decline to Implement ObamaCare's Insurance Exchanges

Peter Suderman | August 17, 2011

...if by *Noid*, you mean *ObamaCare's health insurance exchanges* Last year's health care overhaul calls for every state to set up its own, individual health insurance exchange. In states that don't, the law gives the federal government, through the Obama administration's Department of Health and Human Services, the power to step in and do it for them. What it doesn't do, apparently, is set aside any dedicated funding for the administration to do so. From Politico:

While sorting out the policy kinks in setting up a federal exchange, HHS must tackle another problem: There is no money to pay for it.

A quirk in the Affordable Care Act is that while it gives HHS the authority to create a federal exchange for states that don’t set up their own, it doesn’t actually provide any funding to do so. By contrast, the law appropriates essentially unlimited sums for helping states create their own exchanges.

The lack of funding for a federal exchange complicates what is already a difficult task. HHS will likely be operating exchanges in states like Louisiana and Florida that oppose the ACA on principle and have said they will not comply with the exchange provisions. But HHS also will likely be responsible for several other states that may want to set up exchanges, but will be unable to enact laws and set up the infrastructure under the short time frame specified by the law.

Now, the HHS may still have creative alternatives—shifting money from one place in its budget to another, or delaying contractor payments until after the exchanges are built. But at minimum, it's going to complicate the job of building a federally run exchange.

Practically, this means that states opposed to the law and its exchange requirements have even more reason to refuse to set up the exchanges. Think of a state like Missouri. Voters in the state are on record as being deeply opposed to the law's individual mandate to purchase health insurance. And state officials have indicated that the reason they favor building the exchanges is to avoid federal intervention. ("If we don't act, the federal government will, and that's the last thing Missourians want," state GOP Rep. Chris Molendorp told the St. Louis Post-Dispatch in July.) But without any dedicated funding, the threat of HHS muscling is, at the very least, somewhat reduced, and states that have declined to comply have a much better chance of successfully avoiding the exchanges entirely.

More on why states looking for ways to oppose the law should avoid the exchanges here and here.

Reason needs your support. Please donate today!

Try Reason's award-winning print edition today! Your first issue is FREE if you are not completely satisfied.

PR|8.17.11 @ 10:07AM|#

well, that's what's in it.

in the private sector when the government orders something done and doesn't pay for it, it's called a regulation. If these government employees don't want to comply with the regulation on their own dime, they're certainly welcome to earn a living elsewhere.

Tman|8.17.11 @ 12:34PM|#

What was really scary from the video interview that Nick had yesterday with the Insurance broker was the numbers behind the costs for these exchanges.

If I remember correctly the CBO scored the costs for these exchanges after assuming that only 7% of employers would drop their existing healthcare coverage and pay the fines instead so that their employees would then have to use the exchanges for insurance. Cost to the taxpayer was = $2.5 TRILLION.

Then the further detailed analysis showed that the number of employers who would actually drop their coverage and pay the fine was more like 50%. Cost to tax payers = One HELLUVA lost more than $2.5 trillion.

we've now found out what it's in the bill, and it stinks. Bad.

Tony|8.17.11 @ 9:57AM|#

The Fourteenth Amendment gives the President the power to unilaterally fund the exchanges.

Shorter Tony|8.17.11 @ 10:12AM|#

"Behold the God-King!"

Old Mexican|8.17.11 @ 10:27AM|#

Don't feed the sockpuppet. Oh, and step away from the cage: He flings.

Mr. FIFY|8.17.11 @ 11:32AM|#

That's not poo.

Bill|8.17.11 @ 10:03AM|#

Much as the 1st Amendment gives him the power to restrict speech.

|8.17.11 @ 10:18AM|#

Now, the HHS may still have creative alternatives—shifting money from one place in its budget to another,

So, those Congressional appropriations are more like suggestions?

cynical|8.17.11 @ 10:21PM|#

Much like the power to suggest that the president might not want to conduct a war, hint hint, oh he's not taking the hint, ah nevermind.

|8.17.11 @ 10:19AM|#

OK that looks like its gonna be a lot of fun dude.

www.anon-tools.int.tc

Almanian|8.17.11 @ 11:19AM|#

Your idea of "fun" is strange and disturbing, Anon Bot.

Old Mexican|8.17.11 @ 10:29AM|#

I see that Ron Bailey's last post has now around 575 posts. Did you guys have a lot of fun with "White Injun"?

I'm going to reply to him next time with the nick "Wide Injun" just to see how up the wall I can drive him.

|8.17.11 @ 10:43AM|#

I prefer "What Indian?".

Billy Jack|8.17.11 @ 11:07AM|#

My old high school nickname!

Gibby|8.17.11 @ 3:50PM|#

I think White Indian is Ward Churchill.

June|8.17.11 @ 4:11PM|#

Ward Churchill doesn't even know you're alive.

Old Mexican|8.17.11 @ 10:47AM|#

A quirk in the Affordable Care Act is that while it gives HHS the authority to create a federal exchange for states that don’t set up their own[.]

That's quite a 10th Amendment-abridging "quirk."

Big Mommy Government|8.17.11 @ 10:51AM|#

HHS must tackle another problem: There is no money to pay for it.

Shyeah. 'Cause that's always stopped us dead in our tracks, before now.

JoJo Zeke|8.17.11 @ 10:58AM|#

That's all right! We can just pay for it with all the money the government "stimulates" into existence via food stamps! Voila! PROBLEM SOLVED!

Almanian thee 14th|8.17.11 @ 11:21AM|#

But, but...UNFUNDED FEDERAL MANDATES!!11!

Like howling THAT ever did the states any good. (see also "What Every ~~Regulated~~ Company Has To Put Up With")

RPA|8.17.11 @ 11:27AM|#

Setting up exchanges like pathetic little serfs so the federal titan won't? How about a unanimous declaration of secession and wholesale federal illegitimacy? What the fuck are the feds going to do then? Send in the Park Police?

Concerned Citizen|8.17.11 @ 11:27AM|#

Maybe liberals can volunteer to staff and run the exchanges. Put up or shut up!

Nancy Peblowsi|8.17.11 @ 12:45PM|#

But, we had no way of knowing what was in the bill we wrote.

Reason.com