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If I were a state governor, I would refuse to expand Medicaid under Obamacare because that is how the Feds seduce states into making financial commitments they can’t afford—pay for it at first and then later, pull out the rug.  (O-care pays 100% for awhile, then 90%.  But that could easily change as time goes on, leaving the states holding an ever increasing financial burden.)

But until I read this Investor’s Business Daily editorial, I would probably have created the state exchange if Obama won in November.  Now, I think states can kill the law if they refuse—which is their right under the statute.  From “A State Revolt Against Obamacare:”

Meanwhile, more and more states are refusing to create ObamaCare’s insurance “exchanges.” In fact, just 14 states have even passed laws authorizing the creation of them. What more states are realizing is that setting up an exchange is a fool’s errand. Under the law, if a state doesn’t set up an insurance exchange, the federal government will do it for them. That alone gives states an incentive not to bother, since they can pass all the costs and hassles of running the exchange to the feds. Plus, by handing the job of creating the exchanges to the federal government, states can actually protect state-based companies from the ObamaCare mandate that they provide insurance to their employees or pay a penalty.

That’s because, under the law, the insurance subsidies can only be run through state-administered exchanges, not federally operated ones. And the penalty only applies if employees can get subsidized coverage through an exchange. So, no state-run exchange, no effective business mandate. “Resisting the implementation of exchanges is good for hiring and investment,” explained a letter sent to the nation’s governors signed by 73 lawmakers, and “will help lower the costs of doing business in your state, relative to other states that keep these financially draining exchanges in place.”

Whoa.  That would be a business magnet, really placing Blue states like my ruined California at a greater competative disadvantage than they already are.

I would not leave it at that, though.  I like the idea of state exchanges allowing small businesses and individuals to receive the bargaining and competitive benefits of a large group.  Doing that outside the context of Obamacare would allow states to free companies operating within their borders of Obamacare centralized control mandates and unleash market forces to promote greater competition and lower prices through innovation and catastrophic-only coverages.  And they could also require insurance companies to fund high risk pools—as now happens with auto insurance—permitting people with preexisting conditions to obtain coverage—an important issue that Obamacare tackled, but in a way that destroys underwriting and ultimately will wreck the entire health insurance industry—which of course, is the point.

Alas, too many states currently use their regulatory powers to stifle healthy health insurance competition.  If they don’t want Obamacare, that has to change.

The Moral of the Story: There is a lesson here for Obamacare autocrats: The USA isn’t the EU (yet).  You can’t impose unpopular laws and policies on the people through a corrupt legislative process and heavy-handed bureacratic impositions—and then just expect the country to shrug and go along.  That’s not the American way. The legal non-cooperation that we see growing against Obamacare will not end until the law is substantially changed.

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