Commentary

Just Say No to Implementing Obamacare

President Barack Obama’s government takeover of health care is vulnerable. One year after enactment, it has suffered two major defeats in the courts and enjoys the support of just 38 percent of Americans. The furious assaults that opponents are mounting in Congress and the courts could prove futile, however, if well-meaning yet misguided opponents of the law in Richmond and other state capitols continue to build the architecture of Obamacare.

A key battleground is whether states will implement the law by creating government bureaucracies that Obamacare euphemistically calls health insurance “exchanges.” Starting in 2014, these exchanges would enforce the insurance regulations that will make health care more costly and scarce, and will dole out the subsidies to private insurance companies that will add trillions to the national debt. Supporters have called exchanges “the most important aspect” of the law. The Obama administration wants exchanges set up yesterday, but since it can create only a few exchanges itself by 2014, it is counting on states to help.

States are under no obligation to create these bureaucracies, however, and many have wisely refused. “Creating any kind of exchange is just throwing a lifeline to an unconstitutional law that’s a disaster for patients, for taxpayers and for businesses,” says Gov. Rick Scott, R-Fla. “We’re not going to do that in Florida.”

Whatever is ailing America’s health-care sector, a lack of government bureaucracies isn’t it.”

Govs. Sean Parnell, R-Alaska, Bobby Jindal, R-La., and Rick Perry, R-Texas, followed suit. Gov. Susana Martinez, R-N.M., has vetoed legislation to create an exchange. Resistance from tea party activists and rank-and-file Republicans has defeated exchange legislation in Arkansas, Georgia, Montana, Missouri, New Hampshire and South Carolina, at least temporarily.

Unfortunately, Virginia Republican Gov. Bob McDonnell is not on the same page. McDonnell says Obamacare is unconstitutional and therefore illegitimate. Yet he has created a state commission to study whether Virginia should implement an illegitimate law. Since the answer does not appear self-evident to commonwealth officials, let’s walk through the reasons Richmond should refuse to create any new health-care bureaucracies.

Since the law allows the federal government to create an exchange in states that do not, some say Virginia should create its own exchange rather than let Washington run the show. But Obamacare lets Washington commandeer any exchange that falls short of full compliance with Washington’s dictates, so there really is no such thing as a state-run exchange.

Others advocate following a strategy articulated by the conservative Heritage Foundation, which is to create a “market-friendly” exchange that offers an “alternative vision to Obamacare.” Yet this strategy ignores what Thomas Jefferson explained more than 200 years ago: “The natural progress of things is for liberty to yield, and government to gain ground.”

For example, Massachusetts Republican Mitt Romney followed this advice in 2006 when, as governor, he sent the legislature his proposal for a new, “market-friendly” health insurance exchange. By the time Romney’s proposal returned to his desk, it had become the big-government nightmare on which Congress modeled Obamacare.

When Utah Republican Gov. Jim Huntsman created another “market-friendly” exchange in 2008, it made health insurance more expensive than it was on the open market. Politicians responded to this government failure as they typically do, with more government: They imposed a series of taxes on consumers outside of the exchange to prop up the health plans inside it. In the process, Utah has unwittingly put in place the infrastructure for an Obamacare exchange, thereby proving there is no such thing as a non-Obamacare exchange either.

Creating any sort of exchange is unnecessary, wasteful and counterproductive.

A top Utah exchange official says, “Nearly every exchange function already exists in the private sector.” A Minneapolis company called Bloom Health is already delivering the primary goal of supporters of a “market-friendly” exchange — i.e., letting workers use tax-free employer dollars to purchase their own insurance — without any new government bureaucracy or regulations.

If the Supreme Court overturns Obamacare, any money Virginia spends creating an exchange would be wasted.

Finally, creating an exchange would undermine the effort to spare Virginians the added burdens Obamacare will impose on them. Exchange employees would owe their power and paychecks to Obamacare and would therefore join the fight against repeal. If exchanges start doling out billons of taxpayer dollars in 2014, private insurers will plow much of that money back into fighting repeal in order to protect their subsidies.

Whatever is ailing America’s health-care sector, a lack of government bureaucracies isn’t it. Virginians who seek better, more affordable health care should adopt the more prudent approach of just saying no to creating even more of them.

Michael F. Cannon is director of health policy studies at the Cato Institute and co-author of Healthy Competition: What’s Holding Back Health Care and How to Free It.