No Exchanges, No Obamacare

The Affordable Care Act (Obamacare) continues to run into unforeseen difficulties. One of the gravest is that should states refuse to set up insurance exchanges the federal government will have to do it in their stead, but the tax credits and subsidies which were to help people purchase qualified insurance plans can only be awarded by the states, not the feds. This means that financial incentives to buy insurance will not exist which means that after four years of fighting and trillions of dollars of expense we'll still have as many, maybe even more, uninsured people as we did at the outset.

This is pretty dispiriting given that the ostensible purpose of going through this bitter four year ordeal was to insure all those who couldn't, or wouldn't, buy health insurance on their own. Here's an excerpt from a piece in The Daily Caller that explains the predicament:

The Obama administration is waiving the deadline for states to establish a health insurance exchange in accordance with Obamacare, reports The New York Times. But it should not be taken as a sign of deference to the states, or a willingness to be flexible; it should be taken as a sign of desperation.

The announcement is in fact an attempt by the administration to shore up the health care law’s inherent weaknesses and to cajole states into enacting a federal scheme. Contrary to what the feds now claim, the latest and most glaring weakness of Obamacare is that it was crafted to depend on states to establish health insurance exchanges. These exchanges are meant to be the vehicles for the distribution of tax credits and subsidies to buy qualified health insurance plans.

If a state refuses to set up an exchange, and so far 25 have refused, the federal government must step in and create one. However, the law does not authorize tax credits and subsidies to flow through federally created exchanges, only those created by states....[This] has huge implications. If federal exchanges cannot facilitate tax credits and subsidies, they also cannot be used to impose penalties on employers that fail to comply with the law’s “employer mandate” — a fine of $2,000 per employee per year. States that refuse to set up an exchange could therefore shield thousands of their residents and small businesses from onerous federal taxes and penalties.

[B]y stipulating that tax credits and subsidies would be available only through state-created exchanges, Congress sought to create an incentive for states to set up their own exchanges — because it could not simply order states to create them without overstepping constitutional boundaries. It seems that it did not occur to Obamacare’s authors that many states would simply refuse, or that offering tax credits and subsidies would not be sufficient inducement for them to comply. It was a gross miscalculation, and could mean the undoing of Obamacare.

During the debate over the Affordable Care Act (Obamacare) congressmen scoffed at the suggestion that they should actually be expected to read the 2000+ page bill before they voted on it. House Speaker Nancy Pelosi embarrassed herself by averring that we'd "have to pass the bill to see what was in it."

Well, now they've passed it, by hook and by crook, and they're seeing what's in it, and a lot of it is making those who rammed the bill through Congress and signed the thing into law look like a bunch of incompetent amateurs.