Doomsday Scenario for Obamacare:  Libertarian and Conservative View

Doomsday is near; die all, die merrily.

Shakespeare (1564-1616), King Henry IV

November 12, 2012 – Will Obamacare now march forward – unimpeded by its critics?  I know not, but I expect it will continue to encounter resistance from the states and those who believe it will impose an unacceptable and unsustainable burden on taxpayers.

Here are two views.

·         One, from Michael Cannon from the Libertarian Cato Institute, 13 reasons health exchanges are likely to fail.

First, states are under no obligation to create one.

Second, operating an Obamacare exchange would be illegal in 14 states. Alabama, Arizona, Georgia, Idaho, Indiana, Kansas, Louisiana, Missouri, Montana, Ohio, Oklahoma, Tennessee, Utah, and Virginia have enacted either statutes or constitutional amendments (or both) forbidding state employees to participate in an essential exchange function: implementing Obamacare’s individual and employer mandates.

Third, each exchange would cost its state an estimated $10 million to $100 million per year, necessitating tax increases.

Fourth, the November 16 deadline is no more real than the “deadlines” for implementing REAL ID, which have been pushed back repeatedly since 2008.

Fifth, states can always create an exchange later if they choose.

Sixth, a state-created exchange is not a state-controlled exchange. All exchanges will be controlled by Washington.

Seventh, Congress authorized no funds for federal “fallback” exchanges. So Washington may not be able to impose Exchanges on states at all.

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

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.

Cannon concludes: “For similar reasons, states should decline to implement Obamacare’s Medicaid expansion. The Supreme Court gave states that option. All states should exercise it. “

·        From John Goodman, conservative economist, father of health savings accounts,  founder of National Center for Policy Analysis, in his blog, Health Alert: “Did the Election Save Obamacare?”

First, ObamaCare is not paid for.

Second, ObamaCare promises what it cannot deliver.

Third, ObamaCare mandates and subsidies will destabilize entire sectors of the economy.

Fourth, ObamaCare creates perverse incentives that threaten the quality of care.

Fifth, A weakly enforced mandate will undermine the health insurance marketplace.

Sixth, A strongly enforced mandate will strain almost every family budget.

Goodman concludes.  “These problems have nothing to do with Republican opposition. They are inherent in the legislation itself. Democrats will be forced to face them whether they want to or not.”

Tweet:  Michael Cannon, Cato Institute & John Goodman. National Center of Policy Analysis, conclude Obamacare is unsustainable for budgetary reasons.