States Should Opt Out of Obamacare Exchanges, Says the Goldwater Institute

In a short and pithy video presentation, Arizona's Goldwater Institute explains why states should flip the bird to the Obama Administration by refusing to implement health-insurance exchanges, leaving the feds to handle the heavy-lifting on their own. Goldwater points out that health-insurance exchanges will report non-compliant residents to the IRS, and leave employers open to fines for each employee not covered at a level that satisfies the folks in D.C. Exchanges also opens the door to more corporate welfare for health-insurance companies.

What the Goldwater video doesn't mention is that shifting the burden for health insurance exchanges to the feds effectively sabotages the implementation of Obamacare. As the Washington Post reported in November, the feds are really not prepared to take on the complicated task of setting up exchanges for each state, all of which must be done separately because of varying local laws, markets and conditions. Not surprisingly, the task involves integrating antiquated Medicaid computer systems with current technology to make the online exchanges work.

By the end of this week, states must decide whether they will build a health-insurance exchange or leave the task to the federal government. The question is, with as many as 17 states expected to leave it to the feds, can the Obama administration handle the workload.

"These are systems that typically take two or three years to build," says Kevin Walsh, managing director of insurance exchange services at Xerox. "The last time I looked at the calendar, that's not what we're working with."

The number of refusenik states is now over 20, making the task that much more daunting. Our own Peter Suderman has delved yet more deeply into the challenges of setting up health insurance exchanges.