Governor Kasich Has It Right on Obamacare

Governor John Kasich is expected to opt not to set up a state exchange. This is the right decision for Ohio.  The President’s health care law is unworkable and unsustainable. Rejecting the health insurance exchanges, and equally as important the Medicaid expansion, are two opportunities states have to push back on this law and instead push forward on a better health reform agenda for Ohio.

These exchanges are used in the law to funnel subsidies to government-controlled health plans. Some proponents of the law will undoubtedly criticize the Governor’s decision. But, there are more practical and sound reasons why opting not to adopt a state exchange is best for the states.

First, under the exchange regulations promulgated by the Secretary of Health and Human Services, states would gain no meaningful flexibility or advantage by operating their own exchange, relative to a federally facilitated exchange.  They would simply be acting as vendors to HHS.

Second, states still regulate insurers (including those participating in exchanges) in all matters not otherwise preempted by federal law, regardless of who operates the exchange.  States can also regulate exchange “navigators” through state professional licensure statutes, to ensure equal standards/level playing field with other insurance producers, again, regardless of who operates the exchange.

Third, electing to operate the exchange means that the state government is voluntarily taking responsibility for the results, along with the obligation to secure the necessary operational funding. While the Obama Administration is encouraging states to commit to establishing a state exchange, there are numerous, important details still unknown. Every day that goes by with no roll-out of these vital pieces by the Obama Administration further increases the probability that the Administration is not ready and will fail when the exchanges are expected to open in October.

Fourth, a state that elects to let the federal government set up the exchange, can — if it doesn’t like the results — set up a state exchange to replace the initial federal exchange later. There is no rush to commit.

The next big decision for Governor Kasich will be whether he also rejects the Medicaid expansion. Here, too, there will be many who will try and argue why Medicaid expansion is a good idea. But the promises of no cost, more control, and helping those without health insurance fall flat. The Medicaid expansion will bring long term costs to the states, offers no new flexibility to the existing Medicaid program, and creates greater dependence on government-run health care rather than less.

Health care reform is important, but recognizing a failing solution is even more important. Governor Kasich deserves tremendous credit for recognizing the shortfalls of the Obamacare exchanges and, hopefully, he will come to the same conclusion with the Medicaid expansion. Likewise, instead of acquiescing to a flawed law, states like Ohio can lead the way to the right health care solution.

The was a guest blog written by the Heritage Foundation’s Nina Owcharenko and Ed Haislmaier.  Owcharenko is the Director for Health Policy Studies and Haislmaier is a Senior Research Fellow for Health Policy.

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One comment on “Governor Kasich Has It Right on Obamacare

  1. dc brandt on said:

    this seems like a very shallow arguement. First, there no alternative to the problem that obamacare seeks to address, providing cost effective healthcare in general, and providing care to those that aren’t receiving it. That makes this intellectually incomplete and unbecoming the buckeye institute and the heritage foundation. As a think tank, I would be very interested in an alternative for Ohio that could be implemented in place of obamacare. Then we can seek exemption from obamacare, and perhaps support from federal govt for our own alternative that might be a better solution.

    Second, this seems to go against one of the basic ideas of small government , namely that states can meet needs better than a larger federalgovernment. This seems to argue that we should let the feds figure this out. Operationally, this may be an effective approach, but then we shouldn’t be so quick to complain how they execute the exchanges since we are ”punting” on running one ourselves.

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