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**kimaddison** · 07-11-2012, 02:35 AM

Adding some necessary context to this thread...

Now that the Court has upheld the individual mandate, these insurance exchanges constitute the key to the success or failure of the law. They are also its Achilles' heel.

How's that? Well, as the Cato Institute's Michael Cannon succinctly puts it, "Without these bureaucracies, Obamacare cannot work." And, oddly enough, the law doesn't actually require states to set up these "marketplaces." Moreover, there is no rational incentive for them to do so. If a state sets up an exchange, it then must pay for it, which won't be cheap. Cannon writes, "States that opt to create an exchange can expect to pay anywhere from $10 million to $100 million per year to run it." This is a burden that the states, most of which are already in deep financial trouble, are not likely to embrace with enthusiasm.

The federal government can set up its own exchanges, in theory, but Obamacare stipulates that Washington would then be required to pick up the tab as well. And, as Cannon goes on to point out, "The Obama administration has admitted it doesn't have the money -- and good luck getting any such funding through the GOP-controlled House." And it gets worse. If the federal government is forced to set up an exchange, it faces yet another huge problem. As Sally Pipes and Hal Scherz write, "The text of the law stipulates that only state-based exchanges -- not federally run ones -- may distribute credits and subsidies."

Thus, if a state refuses to set up an exchange, the feds have no real ability to do so either. The states have an opportunity, therefore, to shoot a poison arrow directly into Obamacare's Achilles' heel.

The States Can Still Kill Obamacare

This isn't completely accurate as the IRS has issued rules to allow federal exchanges to distribute credits and subsidies despite the text of the PPACA, but those rules can be changed if the GOP wins the presidency in November.

07-11-2012, 02:35 AM	#34
kimaddison Join Date Oct 2005 Posts 414 Senior Member	Adding some necessary context to this thread... Now that the Court has upheld the individual mandate, these insurance exchanges constitute the key to the success or failure of the law. They are also its Achilles' heel. How's that? Well, as the Cato Institute's Michael Cannon succinctly puts it, "Without these bureaucracies, Obamacare cannot work." And, oddly enough, the law doesn't actually require states to set up these "marketplaces." Moreover, there is no rational incentive for them to do so. If a state sets up an exchange, it then must pay for it, which won't be cheap. Cannon writes, "States that opt to create an exchange can expect to pay anywhere from $10 million to $100 million per year to run it." This is a burden that the states, most of which are already in deep financial trouble, are not likely to embrace with enthusiasm. The federal government can set up its own exchanges, in theory, but Obamacare stipulates that Washington would then be required to pick up the tab as well. And, as Cannon goes on to point out, "The Obama administration has admitted it doesn't have the money -- and good luck getting any such funding through the GOP-controlled House." And it gets worse. If the federal government is forced to set up an exchange, it faces yet another huge problem. As Sally Pipes and Hal Scherz write, "The text of the law stipulates that only state-based exchanges -- not federally run ones -- may distribute credits and subsidies." Thus, if a state refuses to set up an exchange, the feds have no real ability to do so either. The states have an opportunity, therefore, to shoot a poison arrow directly into Obamacare's Achilles' heel. The States Can Still Kill Obamacare This isn't completely accurate as the IRS has issued rules to allow federal exchanges to distribute credits and subsidies despite the text of the PPACA, but those rules can be changed if the GOP wins the presidency in November.
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