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States must "Just Say No" to federal health insurance exchanges

November 18, 2014

The federal health care law gives states an option: Either establish insurance exchanges by January 1, 2014, or the Secretary of Health and Human Services will establish one for them. An “exchange” is essentially a bureaucracy where federally-mandated and regulated health insurance may be bought and sold. Amazingly, some states that otherwise oppose the federal health care law, including some who have joined the Florida lawsuit that is on its way to the U.S. Supreme Court, are choosing to implement these exchanges.

These states may be under the mistaken belief that if they set up an exchange, they will preserve a modicum of state sovereignty – a belief perpetuated by the supporters of the federal health care law as well as by some insurance companies. But these exchanges will be governed by federal regulations and mandates, leaving no flexibility – exactly the situation that has put many states in a bind with runaway Medicaid costs. The State of Arizona has already received a $1 million planning grant from the federal government and just last week Governor Brewer’s office submitted a request for an additional nearly $30 million to establish Arizona’s exchange.

States that establish exchanges are doing nothing short of the federal government’s dirty work. Worse still, they are being complicit in enforcing and entrenching this unconstitutional law.

In its legal briefs filed around the country in defense of the health care law, the federal government has argued that the exchanges are critical to enforcing the law’s individual mandate. That is because the exchanges will be used to determine whether an individual is exempt from the mandate and will report to the federal government, by name and Social Security number, those individuals who are exempt, as well as those who are not in compliance with the mandate.

By 2015, while the federal mandates on exchanges will remain, federal funding for them will be gone. All that states get by establishing exchanges are more federal mandates. What they will give away will be much greater – state sovereignty and the liberty of their citizens.

The choice is very simple: states that oppose the federal health care law should just say no to the exchanges. And for those states like Arizona that have already received money, they should follow the lead of Florida, Oklahoma, and Kansas and send it back.

Diane Cohen is a senior attorney for the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation.

Learn More:

Goldwater Institute: Coons v. Geithner (federal health care lawsuit)

Heritage Foundation: States should return Obamacare Grants

Mackinac Center: Michigan Creeps Closer to Obamacare Exchange

Cato Institute: Should Missouri Create a Health Insurance Exchange?

The Federal Health Care Blog: Preparing for the Exchanges



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