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State laws still block state-run Obamacare exchanges

Monday, June 22, 2015 15:52

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(Before It's News)

TND Guest Contributor: Jason Hart |

State-run Obamacare exchanges can’t be created in 18 states, regardless of the Supreme Court’s decision in King vs. Burwell.

This could be a big deal if the court sides with the plaintiffs and against an IRS rule allowing Obamacare subsidies, mandates and penalties in states using the federal exchange at HealthCare.gov.

Conventional wisdom is that a victory for the King vs. Burwell plaintiffs would cause a public outcry, leading the states without Obamacare exchanges to hurriedly get with the program.

But a lack of support for state Obamacare exchanges is reflected in the fact 18 of the 34 states defaulting to HealthCare.gov have state laws or constitutional amendments forbidding state-run exchanges.

Drafted specifically in response to Obamacare, state “Health Care Freedom” laws and constitutional amendments were enacted to protect people from Obamacare penalties and mandates.

In a recent poll, the free-market Foundation for Government Accountability found little enthusiasm for state exchanges — even among those most reliant on Obamacare exchanges — if the Obama administration loses in King vs. Burwell.

Among individuals enrolled at HealthCare.gov, FGA found 55 percent support for asking Congress to make changes to Obamacare, and only 32 percent support for state-run Obamacare exchanges.

The poll results indicated Americans haven’t warmed to the idea of state-run Obamacare exchanges since President Obama signed the unpopular health insurance law in 2010.

“The concern in many states is that the federal government attached too many strings to the law, and any federal money promised now will disappear,” Josh Archambault, a senior fellow at FGA, said in an email to Watchdog.org.

Archambault said state bans on Obamacare exchanges are among the many hurdles Obamacare advocates would face if the plaintiffs win.

Most state legislatures would need to call special sessions and then “find tens of millions of state dollars to set up an exchange, or pay the federal government for access for some exchange services,” he said.

While making Obamacare supporters happy, this would also invite the wrath of voters who think Congress should change the law.

“There would likely be lawsuits if a state were to try to side step a strong Health Care Freedom Act,” Archambault said. Laws preventing states from enabling Obamacare’s fines and mandates vary slightly by state.

According to the National Conference of State Legislatures, laws banning state-run Obamacare exchanges are on the books in the following states:

Arizona
Florida
Georgia
Idaho
Indiana
Kansas
Louisiana
Missouri
Montana
New Hampshire
North Dakota
South Carolina
Tennessee
Virginia

Constitutional amendments keeping states from creating state-run exchanges were adopted in Alabama, Arizona, Ohio, Oklahoma and Wyoming.

Some states with “hybrid” exchanges relying on HealthCare.gov “could move toward being classified as a state-based exchange by using parts of HealthCare.gov,” Archambault noted.

“However, a few of these would require another round of lawsuits to clear up the legal gray area surrounding these exchanges,” he added.

Even if the King vs. Burwell plaintiffs lose, bans on state-run exchanges will steer governors and state legislators clear of costly forays into Obamacare exchange creation.

The Daily Signal recently found that four states trying to launch state-run Obamacare exchanges have switched to HealthCare.gov, and two states have shut down their exchanges and started over.

Fewer than 20 states are trying to create their own Obamacare exchanges, and three more are considering switching to HealthCare.gov, The Daily Signal’s Melissa Quinn reported.

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Jason Hart is Watchdog.org’s Ohio-based National Labor Reporter. Contact him at [email protected] and follow him on Twitter @jasonahart.

Watchdog.org is an online news organization that publishes articles by independent journalists covering state-specific and local government activity. The program began in September 2009, a project of Franklin Center for Government & Public Integrity, a 501(c)3 non-profit organization dedicated to promoting new media journalism. This article is reprinted with permission.