Michael F. Cannon

Eighth, the Obama administration has yet to provide crucial information that states need before they can make an informed decision.

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

More by Michael F. Cannon

Ninth, creating an exchange sets state officials up to take the blame when Obamacare increases insurance premiums and denies care to the sick. State officials won't want their names on this disastrous mess.

Tenth, creating an exchange would be assisting in the creation of a "public option" that would drive domestic health-insurance carriers out of business through unfair competition.

Eleventh, Obamacare remains unpopular. The latest Kaiser Family Foundation poll found that only 38 percent of the public supports it.

Twelfth, defaulting to a federal exchange exempts a state's employers from the employer mandate — a tax of $2,000 per worker per year (the tax applies to companies with more than 59 employees, but for such companies that tax applies after the 30th employee, not the 59th). If all states did so, that would exempt 18 million Americans from the individual mandate's tax of $2,085 per family of four. Avoiding those taxes improves a state's prospects for job creation, and protects the conscience rights of employers and individuals whom the Obama administration is forcing to purchase contraceptives coverage.

Finally, rejecting an exchange reduces the federal deficit. Obamacare offers its deficit-financed subsidies to private health insurers only through state-created exchanges. If all states declined, federal deficits would fall by roughly $700 billion over ten years.

For similar reasons, states should decline to implement Obamacare's Medicaid expansion. The Supreme Court gave states that option. All states should exercise it.

Medicaid is rife with waste and fraud. It increases the cost of private health care and insurance, crowds out private health insurance and long-term-care insurance, and discourages enrollees from climbing the economic ladder. There is scant reliable evidence that Medicaid improves health outcomes, and no evidence that it is a cost-effective way of doing so.

My colleague Jagadeesh Gokhale estimates that expanding Medicaid will cost individual states up to $53 billion over the first ten years. That's before an emboldened President Obama follows through on his threats to shift more Medicaid costs to states.

Neither the states nor the federal government have the money to expand Medicaid. If all states politely decline, federal deficits will shrink by another $900 billion.

Now is not the time to go wobbly. Obamacare is still harmful and still unpopular. The presidential election was hardly a referendum, as it pitted the first person to enact Obamacare against the second person to enact it. Since the election, many state officials are reaffirming their opposition to both implementing exchanges and expanding Medicaid.

If enough states do so, Congress will have no choice but to reopen Obamacare. With a GOP-controlled House, opponents will be in a much stronger position than they were when this harmful law was enacted.

This article appeared in National Review (Online) on November 9, 2012.


Michael F. Cannon

Michael F. Cannon is the Cato Institute's director of health policy studies.
 
TOWNHALL DAILY: Be the first to read Michael F. Cannon's column. Sign up today and receive Townhall.com daily lineup delivered each morning to your inbox.