States must “Just Say No” to Obamacare health insurance exchanges

by Diane Cohen
Goldwater Institute

Obamacare gives states an option: Either establish insurance exchanges by January 1, 2014, or the Secretary of Health and Human Services will establish one for them. An “exchange” is essentially a bureaucracy where federally-mandated and regulated health insurance may be bought and sold. Amazingly, some states that otherwise oppose Obamacare, including some who have joined the Florida lawsuit that is on its way to the U.S. Supreme Court, are choosing to implement these exchanges.

These states may be under the mistaken belief that if they set up an exchange, they will preserve a modicum of state sovereignty – a belief perpetuated by the supporters of Obamacare as well as by some insurance companies. But these exchanges will be governed by federal regulations and mandates, leaving no flexibility – exactly the situation that has put many states in a bind with runaway Medicaid costs. The State of Arizona has already received a $1 million planning grant from the federal government and just last week Governor Brewer’s office submitted a request for an additional nearly $30 million to establish Arizona’s exchange.

States that establish exchanges are doing nothing short of the federal government’s dirty work. Worse still, they are being complicit in enforcing and entrenching this unconstitutional law.

In its legal briefs filed around the country in defense of the health care law, the federal government has argued that the exchanges are critical to enforcing the law’s individual mandate. That is because the exchanges will be used to determine whether an individual is exempt from the mandate and will report to the federal government, by name and Social Security number, those individuals who are exempt, as well as those who are not in compliance with the mandate.

By 2015, while the federal mandates on exchanges will remain, federal funding for them will be gone. All that states get by establishing exchanges are more federal mandates. What they will give away will be much greater – state sovereignty and the liberty of their citizens.

The choice is very simple: states that oppose Obamacare should just say no to the exchanges. And for those states like Arizona that have already received money, they should follow the lead of Florida, Oklahoma, and Kansas and send it back.

Diane Cohen is a senior attorney for the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation.

Learn More:

Goldwater Institute: Coons v. Geithner (federal health care lawsuit)

Heritage Foundation: States should return Obamacare Grants

Mackinac Center: Michigan Creeps Closer to Obamacare Exchange

Cato Institute: Should Missouri Create a Health Insurance Exchange?

The Federal Health Care Blog: Preparing for the Exchanges


  1. LEO IN TSN says:

    Miss Cohen is right on target with her assessment of this cowardly (at best) failure by the AZ government. The AZ voters passed an “Opt-out” referendum that removes AZ from obamacare under the US Constitution, and under the AZ Constitution. Yet, the governor and the legislature are secretly spending to implement it in AZ. According to certain state legislators, “it’s just in case the lawsuits are lost.” That just ignores our existing Opt-out, and throws US to the obama sharks.

    The other ugly little secret about obamacare is that the mandate for a federal government database of ALL medical records was not in the obamacare bill; it was secretly included in a plain ol’ spending bill that noone paid any attention to, and it now stands on its own. It was to be in place by 2012, but Kathleen Sebelius, the Secretary of HHS, is now leading a blitzkrieg to force the states to create this monstrosity immediately. If you think life is tough now, just wait ‘till the obamacrats get your medical records that detail everything you’ve ever told any health professional and everything you’ve ever been treated for. You may not be able to drive, possess weapons, open a business; if you’re old or sick, you’ll get an appointment with the obama death panels.

    Strangely, the authors of our Opt-out referendum chose to ignore this database issue, saying that “if any part of obamacare loses in court, the whole thing goes down.” They seemed to be happily, or smugly, oblivious to the distinction that this was NOT part of obamacare and is not effected by attacks on obamacare.

    And, oh yes, why have the AZ Five (R-representatives) backed away from their campaign promises to Defund this entire mess? They have strangely gone collectively mute. It must be that DC water.

    Thank you, Miss Cohen, for addressing this catastrophe in the making, and God bless America.

    • Steven Yockey says:

      Well, perhaps as an anti-Federalist, she might be right on target, but as a reasonable and prudent person, she falls far sort of the mark. This libertarian diatribe against public access to healthcare is getting kind of stale. It’s the same old, worn out argument put forth against the Federalists, over two hundred years ago, when the United States was trying to adopt a Constitution, and move forward from the weak and ineffective Articles of Confederation. Don’t let these ideologues fool you. They would rob you of your right to health care, and ensure continued suffering and financial duress, just to maintain their narrow concept of liberty, which in a realistic, functional sense, is the antithesis of liberty. The argument between those who favored states’ rights against those who favored a strong, federal form of government was settled in 1865. Get over it!

  2. Pima County PC says:

    Yeah, 2 “thinking” trolls who wecome our medical records be in the hands of government bureaucrats, who believe that liberty means every facet of our lives be controlled by a centralized behemoth government.

    If you want a “right” to health care, you should be wanting more choices in insurance coverage. You will not get this under Obamacare. Repeal Obamacare! Abort Sebelius!

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