Let the Feds Run the Obamacare Exchanges

With Obama’s arbitrary February deadline for States to approve his massive government takeover of healthcare, 17 have officially opted out.  Governor Jan Brewer stated the obvious:

Arizona Gov. Jan Brewer says her decision to opt out of establishing a state-run health insurance exchange under Obamacare was one of the "most difficult decisions" she's made as governor.

But it the end, she concluded it would be too costly to state taxpayers and far too risky for the state over the long haul because of uncertainty about how much control the federal government would actually have over the program, which is designed to help people determine the best and most affordable coverage plan for their needs.

"After investigating this very, very thoroughly, this is one of the most difficult decisions I've had to make," the Republican told Fox News' Greta Van Susteren Thursday night.

"We know that the Affordable Care Act is going to be the law of the land, but the bottom line is that it's way too expensive, she added. "We're not going to know what's going to happen because the federal government will come in and rewrite rules. They won't fund it, so in 2015 in Arizona, it will cost my citizens between $27 million or $40 million a year to keep it operating.

"It's just -- it's too risky."

Risky is right.  The U.S. Department of Health and Human Services can arbitrarily issue mandates without going through the legislative process.  The States would have no recourse but to implement their policies.  So why would they want to subject themselves to the whims of a federal bureaucrat, and be burdened with the cost of operating them.  Let the feds run the exchanges.  The States would do better to stay away from this train wreck.  But unfortunately, they won’t get away unscathed. There is the “Woodwork Effect.”    

Estimated Costs Due to the “Woodwork” Effect. The Obamacare exchanges will systematically identify and enroll millions of individuals in either Medicaid or subsidized exchanges. Even if a state does not expand Medicaid, it can expect enrollment and spending to increase in 2014 as a result of what Medicaid officials refer to as the “woodwork” effect: Individuals who qualify under current law for Medicaid, but are not enrolled, coming “out of the woodwork” to enroll. For those individuals, the normal federal Medicaid match rates will still apply.

Any state that adopts the Obamacare Medicaid expansion will likely reinforce and exacerbate this effect. State lawmakers should probe whether the woodwork effect is fully accounted for in the analyses they are given.

If you want an example of the difficulty of States trying to comply with federal guidelines, look to North Carolina.  The mentally ill may be forced onto the streets due to changing standards and noncompliance:

About 2,000 people with mental disabilities are in danger of losing their lodging in group homes on Jan. 1, their evictions triggered by changing Medicaid rules.

State officials and advocates for the disabled have been talking about the problem for months but have not come to a resolution. The new regulations have group home operators and state health administrators talking about strategies that could keep group homes open when a vital source of income is threatened.

“We’re continuing to struggle with the problem,” said Sen. Louis Pate, a Republican from Mount Olive and a co-chairman of a health and human services legislative oversight committee. “It’s awfully difficult when the feds are basically telling us what to do.”

The issue is how people qualify for services such as help eating, bathing and moving that are paid by the government health insurance program.

For years, the state’s standards made it harder for people to qualify for such services if they lived at home, but that violated federal rules. To get in compliance, the state changed its system so that those living in licensed facilities had to meet the same qualifications as those living in a private home.

If the State’s believe they’ll have a say in running these exchanges, they're kidding themselves.

Source: http://www.newsobserver.com/2012/11/12/2480017/2000-could-lose-their-lodging.html#storylink=cpy

http://www.heritage.org/research/reports/2012/09/state-lawmakers-guide-to-evaluating-medicaid-expansion-projections

http://www.newsmax.com/Newsfront/healthcare-exchanges-risky-brewer/2012/11/30/id/465957

http://blog.heritage.org/2012/11/20/obamacare-insurance-exchanges-states-have-options/