The American Legislative Exchange Council, a group of conservative state legislators, has approved a resolution encouraging all states to refuse to create a health insurance “exchange” and to end the Obamacare grants the federal government is sending to states for the purpose of creating Exchanges:

State-created PPACA exchanges put states in the position of ceding their resources and sovereignty to the service of the federal government, sacrificing their ability to flexibly serve their own citizens…

Twenty-six states are suing to have PPACA struck down partly due to the arguable unconstitutionality of the individual mandate, and briefs submitted by the federal government in Florida v. U.S. Department of Health and Human Services make clear that exchanges are a key part of the individual mandate…

[A]s states continue to plan exchanges in preparation for PPACA implementation…it [becomes] less likely the PPACA will ultimately be declared unconstitutional…

[T]hese exchanges would be completely artificial devices offering insurance products regulated in their essential characteristics by the federal government, making exchanges anything but free markets [that instead] will continue to be subject to the arbitrary whims of the federal bureaucracy…

There is no penalty for a state in allowing the federal government to implement an exchange…

NOW THEREFORE BE IT RESOLVED THAT…it is not in the best interest of [a] state for any state official to participate in planning or establishing health insurance exchanges as provided for in the federal Patient Protection and Affordable Care Act; and…Congress [should] defund planning grants to states for the establishment of PPACA health insurance exchanges by the states.

State officials who refuse to create Obamacare Exchanges and who send back related federal grants will now do so with the backing of both the Heritage Foundation and the nation’s largest organization of conservative state legislators.

As I explained in my testimony before the Missouri legislature, states should refuse to create any type of Exchange or similar government bureaucracy.  But this is welcome progress.