The Post-Dispatch reports today on the federal government taking control of a health insurance exchange in our state since the legislature has failed to authorize the creation of a state-based exchange. I manage to make it into the article:
“I believe the Legislature should move forward with creating a state-based health insurance exchange,” he said. “I’d rather have an exchange with rules set by people in Missouri than by unelected bureaucrats in Washington, D.C.”
Barnes said he understands the temptation to ignore mandates of the health care law.
“I don’t like it, either,” he said.
There are two considerations in whether to set up an exchange.
Subsidies for 2 of 3 Missourians
The first, which is not stated in the PD article, is that the new federal healthcare law provides subsidizes to Americans who make up to 400 percent of the federal poverty level to help pay for insurance purchased through state-based exchanges. Four-hundred percent of FPL is a ridiculously high number for what are essentially “health care stamps.” For a family of four then, federal subsidies will be available for families making up to $92,200 per year. According to the Kaiser Foundation, nearly 4 million Missourians will be eligible for subsidies – or approximately 66 percent of Missouri’s population. Think about that: two of every three Missourians under the age of 65 will be receiving health care welfare under the new federal health care law!
Some will make the argument that we can stop implementation by refusing to create an exchange because the subsidies are not available in states that do not have state-run exchanges, and, if enough states refuse to create exchanges, there will be rebound effect nationally. Republicans in Congress argue the law clearly states subsidies are not available in states without state-run exchanges. The White House disagreed, and had the IRS draft a rule stating that everyone under 400% FPL is eligible whether they live in a state with a federally-run or a state-run exchange. Whether the IRS rule holds up in court or not remains to be seen – and it will be a long time before we know.
In the meantime, even if we assume that subsidies are not available to people in states that have not created state-based exchanges, the question is whether we deny Missourians the full benefits of the taxes they pay.
The ridiculousness of the level of subsidies is a great argument for repeal – in Washington. In Missouri, we don’t have that choice. Our choice is whether Missourians are going to be taxed to pay for this unaffordable mess in New York, California, Texas, and Florida, but then not get any benefits from it here in Missouri. By failing to create our own exchange, we shortchange the tax dollars of Missourians.
I don’t like the new federal health care law. I hate the idea of expanding welfare to two out of three Americans. But I also recognize the situation. Missouri state government cannot repeal the law on its own. To refuse to create the exchange is to tell Missourians that they have to pay the costs of the law, but can’t get any of the benefits. That might make folks feel like they’re newfound William Wallaces saving the Republic, but it will not change anything about federal policy – and it will shortchange our own citizens.
Establishing Our Own Rules
The second and more pressing issue is whether we want an exchange set-up and run by unelected bureaucrats in Washington over whom Missourians have little to no say – or whether we have one set up by elected officials here. Some might think that this has no practical implication – that Washington would put such strict limits on our flexibility that we have freedom in name only. I think this is dangerously wrong. For example, what if Kathleen Sebelius chooses to require plans within the exchange to offer elective abortion coverage? I understand there’s a state law against coverage of elective abortions in a hypothetical insurance exchange. The question is whether the federal government will agree to follow that law in implementing an exchange here. Count me as a skeptic. If the feds ignored this, there would soon be a lawsuit, but do we want to chance it?