Tag: butch otter

ObamaCare Debate Challenge: Lawrence Wasden Edition

Congress empowered states to block major provisions of ObamaCare, including its subsidies and employer mandate. All states need do to is refuse to create a health insurance “exchange.” (And a whopping 34 states, accounting for two-thirds of the U.S. population, have done just that.)

Supporters of the law are doing their level best to deny what the law says. It has now been one full month since I challenged anyone and everyone to debate with me the powers Congress gave states to block these and other parts of the law. My debate-challenge video (embedded below) has nearly 3,000 views on YouTube. And how many brave ObamaCare supporters have accepted my challenge? Zero.

The latest to deny what the law says is Idaho Attorney General Lawrence Wasden, who has issued an opinion that Congress did not give Idaho these powers. So I hereby issue my challenge directly to Wasden, or any member of his staff, or his entire staff: I say you are misreading the law, and doing Idaho legislators, employers, and taxpayers a great disservice. So let’s have a debate over whether Congress allows Idaho to block ObamaCare’s employer mandate, and whether you are accurately portraying the law to Idaho legislators. 

Update: Washington & Lee University law professor Timothy Jost protests that he debated this issue with both Jonathan Adler and me back in October 2012. True enough, Jost is the only person who has agreed to debate this issue with us live. Here’s the video of that debate. Decide for yourself who bested whom. I meant my “zero” count to be prospective, and would be happy to debate Jost again.

Goldwater Attorney: ObamaCare-Compliant Exchange Would Violate Idaho’s Health Care Freedom Act

Idaho Gov. Butch Otter (R), who added Idaho to the multi-state challenge that sought to overturn ObamaCare as unconstitutional, now supports helping the Obama administration implement the law by establishing and funding a health insurance “exchange.” Exchanges are new government bureaucracies that enforce ObamaCare’s many regulations, channel billions in deficit-financed government subsidies to private health insurance companies, and help the IRS penalize individuals and employers who fail to purchase government-approved insurance. So far, some 32 states have refused to establish an Exchange themselves. If Idaho’s legislature authorizes an Exchange, they will make Idaho the only state where a Republican legislature and governor acted together to implement this essential piece of ObamaCare.

One could argue this is a debate Idaho shouldn’t even be having. Establishing an ObamaCare compliant Exchange would violate Idaho state law.

In a letter sent to Idaho legislators today, Goldwater Institute attorney Christina Sandefur explains, “establishing a PPACA state health insurance exchange in Idaho would conflict with the state’s Health Care Freedom Act.” Idaho’s Health Care Freedom Act protects the “right of all persons residing in the state of Idaho in choosing the mode of securing heatlh care services free from the imposition of penalties” including “any civil or criminal fine, tax, salary or wage withholding, surcharge, fee or any other imposed consequence.” Sandefur explains (as I have explained elsewhere), “State exchanges that conform to PPACA are inconsistent with this safeguard because they are the key vehicles for implementing the individual mandate tax,” as well as the penalties ObamaCare levies on employers under the employer mandate. Idaho’s Health Care Freedom Act forbids state officials or state-created non-profits from doing anything that helps to enforce such penalties: “No public official, employee, or agent of the state of Idaho or any of its political subdivisions, shall act to impose, collect, enforce, or effectuate any penalty in the state of Idaho that violates the public policy set forth in [this Act].” As a result, Sandefur writes, “Idaho public officials who operate exchanges would be violating state law,” and “the Attorney General is charged with taking legal action against those who do so.”

Otter himself signed the Health Care Freedom Act into law in 2010, and was the first governor in the nation to do so. The purpose of that Act was to prevent state officials from doing what Otter is now trying to do. “What the Idaho Health Freedom Act says,” Otter boasted at the time, “is that the citizens of our state won’t be subject to another federal mandate or turn over another part of their life to government control.” Yet he is now trying to subject Idaho residents to those mandates, and violating his own law to help the federal government implement ObamaCare. The best spin I can put on this is that Otter is getting some very, very bad advice about the Health Care Freedom Act and ObamaCare’s Exchanges.

The situation in Idaho is a replay of Arizona, which enshrined a similar Health Care Freedom Act in its Constitution. As Arizona officials were wrestling with whether to establish an Exchange, Sandefur and her Goldwater Institute colleagues threatened legal action if Arizona did so. That threat was likely a major factor in Gov. Jan Brewer’s (R) decision to oppose an Exchange.

Will States Lose Medicaid Funds If They Fail to Create an ObamaCare ‘Exchange’?

In recent weeks, officials from two states have claimed that if they do not set up an ObamaCare health insurance “Exchange,” the state will lose federal Medicaid or State Children’s Health Insurance Program funds. Idaho Gov. Butch Otter (R), has since walked back that claim. New Hampshire Commissioner of Health and Human Services Nicholas Toumpas has not.

In a January 19 letter to the New Hampshire House of Representatives, Toumpas writes:

The Patient Protection and Affordable Care Act (“ACA”) mandates that states create a virtual health coverage marketplace called an Exchange. To ensure compliance with this federal mandate the law provides that having an Exchange in place by January 1, 2014, is a condition precedent to receipt of Medicaid funding commencing in 2014.

I have not heard the Obama administration or any other ObamaCare supporter claim that the law contains such a mandate. I have made inquiries in a handful of states. None of them report that the Obama administration has said that failing to create an Exchange will result in the loss of Medicaid or SCHIP funds. If what Toumpas says is true, it will certainly come as a shock to the 35 states that have not enacted legislation to create an Exchange, including many states that have flat-out refused.

But is it true? Parts of ObamaCare might seem to support Toumpas’ claim.

  • Section 1311 declares that each state “shall” set up an Exchange.
  • The law also imposes conditions on the receipt of federal Medicaid and SCHIP funds, and those provisions do make reference to Exchanges. Section 2101 provides that, with regard to certain children who are not eligible for SCHIP, states receiving federal SCHIP funds “shall establish procedures to ensure that the children are enrolled in a qualified health plan that…is offered through an Exchange established by the State under section 1311.”
  • Section 2201 provides that as a condition of receiving federal Medicaid funds, states “shall establish procedures for” several things, including “ensuring that individuals who apply for but are determined to be ineligible for [Medicaid and SCHIP] are screened for eligibility for enrollment in qualified health plans offered through such an Exchange.” The words “such an Exchange” refer to the words “an Exchange established by the State under section 1311,” which appear a few lines before.

Thus, sections 2101 and 2201 might seem to require states to establish an Exchange so that the required “procedures” can interface with it. But there are serious problems with that interpretation.

First, the directive that states “shall” create Exchanges does not amend that part of the U.S. code where Congress imposes conditions on Medicaid and SCHIP funds—i.e., the Social Security Act, or chapter 7 of title 42. It instead appears in chapter 157, which is also where Congress explains that the consequence for failing to create an Exchange is that the federal government will create one.

Second, sections 2101 and 2201 provide, respectively, that states “shall establish procedures to” enroll certain children through a state-run Exchange, and that states “shall establish procedures for” enabling the state’s Medicaid-eligibility system to coordinate with a state-run Exchange. One need not diagram those sentences to see that the object of “shall establish” is “procedures,” not “Exchange.”

Third, ObamaCare does create these “coordination” conditions within the Social Security Act. That fact demonstrates that ObamaCare’s authors knew how to make the directive to create an Exchange an explicit condition of receiving Medicaid and SCHIP funds, if that’s what they wanted to do.

Fourth, if ObamaCare’s authors had intended to condition Medicaid and SCHIP funds on the creation of Exchanges, or if that were a defensible interpretation of the law as written, then one might expect to have heard members of Congress discussing it. One might expect the Obama administration to have informed states of this condition as part of their effort to encourage states to implement the law. I have been paying fairly close attention to this issue. I have seen no evidence of either.

Fifth, the Supreme Court has held that “if Congress desires to condition the States’ receipt of federal funds, it must do so unambiguously, enabling the States to exercise their choice knowingly, cognizant of the consequences of their participation.” It is simply not credible to argue that ObamaCare unambiguously conditions Medicaid and SCHIP funds on the creation of an Exchange. The law never does so explicitly, and the language and structure of the law militate against the claim that it does so implicitly.

A more reasonable interpretation of these conditions is that states will be in compliance so long as they have the required procedures at the ready—regardless of whether those procedures are coordinating with a state-created Exchange, a federal Exchange, or no Exchange (in the event that neither level of government creates one).

I have no doubt that, had ObamaCare’s authors had any inkling that two thirds of states might balk at setting up an Exchange, they would have made it a condition of Medicaid and SCHIP participation. But they didn’t foresee the widespread resistance ObamaCare would encounter. When drafting ObamaCare and for some time afterward, they honestly thought, “The more people learn about this bill, the more they [will] like it.” Thus they didn’t create that requirement.

If Toumpas is the only state or federal official who sees this mandate in the law, that’s probably because it isn’t there. Just as important, there is no evidence that the Obama administration sees or is enforcing such a requirement. If Toumpas has such evidence, he should furnish it.

Until then, New Hampshire and the other 49 states can be confident that refusing to create an Exchange will not cost them Medicaid or SCHIP funds.

Heritage Scholar Urges States: Don’t Implement ObamaCare Exchanges, Send Back Grants

Back in March, Heritage Foundation scholar Ed Haislmaier wrote that states could blunt ObamaCare’s impact (A) by creating non-ObamaCare compliant, “consumer-centered” Exchanges and/or (B) by creating ObamaCare-compliant, “defensive” health insurance Exchanges.  Many states, including some that are suing to overturn ObamaCare as unconstitutional, saw this as a green-light from the free-market groups and forged ahead with creating an ObamaCare-compliant Exchange.

In a blog post last week, Haislmaier recanted on Strategy B.  He writes that “defensive” Exchanges won’t blunt the impact after all, and that states should refuse to create any type of ObamaCare-compliant Exchange and send back all federal ObamaCare grants:

Initially, while HHS was still deciding how to implement the legislation, a narrow window of opportunity existed for states to pursue a “pushback” strategy of creating a restricted exchange and requiring it to contract with the state’s Medicaid program and insurance department to perform the eligibility, enrollment, and insurance regulation functions that state lawmakers seek to retain control of. HHS effectively closed that window in its proposed exchange regulations issued in July…

The combined effect of these regulations and grant requirements are that a state would have to agree to surrender any last vestiges of meaningful control over how Obamacare is implemented. Thus, a state would now have no more real control over an exchange it set up than over one HHS established

Consequently, at this point the best course of action for states is to neither apply for nor accept exchange establishment grant funding.

Free-market groups are now united on these points.

Haislmaier still recommends that states pursue  Strategy A: a “consumer-centered,” non-ObamaCare Exchange using only state-government dollars.  As I explain here, however, there is no such thing as a non-ObamaCare Exchange.  Insurance carriers will not patronize non-ObamaCare Exchanges, and the federal government will commandeer them or push them aside to create an ObamaCare Exchange.  Creating any type of Exchange merely lends manpower to ObamaCare’s federal takeover of health care.  States should refuse.