In an effort to intimidate states (that is, Republican governors) into setting up state-run ObamaCare exchanges, the leftist authors of the Affordable Care Act have opened the door to lawsuits that could prevent the federal government from selling health plans at affordable rates.
A centerpiece of the ACA involves the offering of federal subsidies “…designed to help low and middle-income individuals purchase health insurance.” However, as the Act clearly states, “…subsidies may only be applied to insurance exchanges set up by individual states, not exchanges implemented by the federal government.” Congress also denied federal exchanges the authority to provide tax credits to employers who offer federally approved insurance plans to their employees.
ObamaCare revolves around the state-financed implementation of exchanges which the law claims will be one-stop shopping centers for healthcare plans approved by the Department of Health and Human Services. However, as of November 28th, 17 states have responded to an HHS-imposed deadline by refusing to set up a state run exchange, leaving it entirely to the federal government to do so.
As a result, exchanges that the federal government will be forced to build in these states may NOT, according to the Act, provide the subsidies and tax credits necessary to make the purchase of ObamaCare plans affordable. And the remaining 10 states have yet to decide whether to build a state exchange or, like the 17 preceding them, leave it to the federal government as well! Half the states in the nation could therefore be forced to “offer” unaffordable healthcare plans. Quite an embarrassing proposition for a president who had claimed his namesake plan would reduce insurance premiums by $2,300 per year for the average family!
Why would ObamaCare authors provide such a glaring loophole in the law, one that says without possibility of contradiction that only state-run exchanges may offer the subsidies and tax credits so vital to participation in the Act? A number of legal scholars “…claim the legislative history shows that the drafters wanted to give states strong incentives to create their own exchanges, and expected them to do so.” What this really means is that the authors were trying to INTIMIDATE and FORCE states into creating exchanges. Otherwise, the left could claim that the Republican governors of those states who did not do so were COSTING their constituents money (subsidies) and denying them affordable insurance coverage, thanks to their refusal to build an exchange. A typical leftist scam and thuggish “boot on the throat!”
However, over half the population remains opposed to the ObamaCare takeover of healthcare. Moreover, in refusing to build a state-run exchange, Wisconsin Governor Scott Walker informed HHS Secretary Kathleen Sebelius that “…Wisconsin is already able to provide healthcare to 90% of its citizens without an exchange and the new system would not improve coverage for state citizens.” (4)
And in addition to the fact that the vast majority of Americans are very satisfied with their current healthcare plans, ObamaCare exchanges would cost states up to $100 million per year. States would have NO control over which insurance plans may be offered or how they would be rated, how individuals or employers would be charged, or indeed how much the HHS would force the state itself to pay on a yearly basis in the future. The federal government makes all of the rules, and the state gets to pay the tab.
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