Why implementing Obamacare’s Insurance Exchanges is NOT a good idea

You may have heard about the Republican governors who aren’t participating in the implementation of Obamacare. There are now six of them, with Rick Scott (Florida), Scott Walker (Wisconsin) and most recently Rick Perry (Texas) receiving the most attention.

The Main Stream Media outlets are, as usual, spouting one identical narrative on this, and it goes something like: “Can you believe those stupid Republican governors who hate people and want them to get sick, and die, and then pay more for their insurance, and now they won’t put Obamacare in their states, but we won’t tolerate non-compliance, because they’re stupid, and evil, …and also stupid…….!

(***If you can do that all on one breath, it sounds more accurate.)

Thus, if your only news source was CNN, ABC, CBS, NBC, and PBS, you have no idea why anyone (let alone a Governor) would be fighting this wonderful gift bestowed on us by the Dems.


Kudos to BLACK METTLE blog, who tipped us to a full-throated, well-reasoned argument against implementing Obamacare in those states. After reading it, one could argue that even states which like the law might consider following suit.

Written by Michael Tennant at The New American:

The PPACA (aka “Obamacare“) requires states to establish insurance exchanges on which individuals who do not have employer-sponsored health insurance can shop for the plan that best meets their needs at a price they can afford. If a state fails to establish an exchange, the federal government will do so.
Southern Methodist University law professor Tom Mayo questioned (Texas Governor Rick) Perry’s decision to forego setting up an exchange, telling KXAS-TV that Perry is therefore “inviting the federal government to come in and do it for us.”
“I don’t see how that protects state sovereignty,” he added.

However, as Perry pointed out in his letter:

“The PPACA does not truly allow states to create and operate their own exchanges. Instead, it gives the federal government the final say as to which insurance plans can operate in a so-called “state” exchange, what benefits those plans must provide, and what price controls and cost limits will apply. It leaves many questions to be answered later through federal “future rulemaking.” In short, it essentially treats the states like subcontractors through which the federal government can control the insurance markets and pursue federal priorities rather than those of the individual states.”

Indeed, the existing regulations for creating exchanges, contained in a final rule issued by HHS in March, are incredibly detailed and complex, according to Nicole Kaeding, state policy analyst at Americans for Prosperity:

“The 644-page rule included the word “must” over 1,000 times and “require” more than 320 times. The rule gets so specific as to dictate what items a state must include on its exchange website and how its call center must operate. Under the regulation, any state hoping to create an exchange must first apply to HHS using its “exchange blueprint” template. Secretary Sebelius has sole authority to approve or deny the application. Additionally, any “significant change” must also be approved by the secretary.

The rule itself says that the “minimum functions [outlined in the rule] … are a floor, not a ceiling.” Proponents … argue that if a state doesn’t create an exchange, the federal government will. Under these thousands of pages of regulations and frameworks established by HHS, there is no distinction between the two. States only have the option to further concentrate control in the hands of bureaucrats, not keep it where it belongs: between patients and doctors.”

Moreover, Kaeding observes, because “Congress did not provide tax subsidies to aid individuals’ purchases in federal exchanges … businesses in states that do create state exchanges will face higher fines than businesses in states that do not.”
In other words, states have nothing to gain and everything to lose by establishing exchanges. Perry is therefore right to reject them.

….So, these crazy governors aren’t so crazy after all.

Obamacare is going to be a contentious issue for the remainder of this campaign and, if it survives, for years to come. It wasn’t popular when it was passed, and it’s even less so now. Actually, folks are even pessimistic about its economic impact, with a recent Gallup poll saying Americans are more likely to say (Obamacare) will hurt the national economy (46%) rather than help it (37%).

Hope and Change, baby.


I’ll leave you with a brief word on all this from Governor Perry. He may never be Mr. Eloquence, but I’d prefer someone to govern well rather than speak well. And even though he flamed out during the Primaries, by all accounts he’s a good man and a very good governor.

15 responses to “Why implementing Obamacare’s Insurance Exchanges is NOT a good idea

  1. livinrightinpgh

    You have to LOVE a system where the bureaucrats in Washington take a business like healthcare, over-regulate it to the point it CAN’T work, and then stand back and say: “SEE, it’s a failure. We mighty pols MUST do SOMETHING.”

    AND, you get a POS like ObamaCare, or as I now like to refer to it: BOTAX.

    How about we give the FREE MARKETS a chance? There are hundreds and hundreds of health insurance companies doing business in the US. Yet, in most states, you only have choices between a handful.

    Open up the state borders and allow health insurers to compete across state lines. Enact REAL tort-reform like they did in Texas. (Do a little digging and SEE the positive impact THAT’S had in their State.) Insure EVERYONE based on their risk, JUST LIKE THEY DO IN AUTO INSURANCE.

    • Waaaay too logical, Pgh.

      That would probably solve most of the issue, and THEN what would the pols do?

      • LivinRightinPGH

        It must take a “certain” kind of mindset among the regulators to willingly break something so that you feel relevant in trying to fix it. You can’t be THE problem and THE solution at the same time….

        • Very true, brother. But that doesn’t mean they will stop a successful strategy anytime soon.

          When the voters figure out they’re being played, it will be ugly.
          Just don’t hold yer breath waiting for that to happen……

  2. Great write-up JTR! And thanks for the shout out.

  3. JTR is correct! And the political fix will no doubt have the word “comprehensive” in front of it.

  4. I’m hopeful that Governor Brewer here in AZ doesn’t set them up, now with a few changes in Washington we can get the whole thing repealed.

  5. Pingback: After the Conventions: the Truth shall set you free | Two Heads are Better Than One

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