Sparing Nevada from ObamaCare

The demise of the Republican Party appears overstated from the vantage point of the state capitals, where the number of GOP governors has increased from 22 to 30 since President Barack Obama took office.

And it’s one of the quirks of the cobbled-together Obama­Care law that these governors retain considerable power to decide to what extent that long-term prescription for rationed, single-payer health care – and its enormous, job-eroding costs – will be imposed.

“Champions of ObamaCare want Americans to believe the president’s re-election ended the battle over the law,” wrote James Capretta and Yuval Levin of the Ethics and Public Policy Center, in The Wall Street Journal last week. “It did no such thing,” because the administration is heavily dependent on the states for its implementation. And governors of both parties remain highly critical of the law.

Talk of the law’s inevitability is meant to pressure governors into implementing it on the administration’s behalf. But the states still face two key choices: whether to create state health insurance exchanges and whether to expand Medicaid. “They should say ‘no’ to both,” Mr. Capretta and Mr. Levin urge.

ObamaCare is a massive entitlement expansion, expected to load 30 million more people onto Washington’s health-welfare rolls. The law anticipates the states will take on the burden of implementing the expansions. But states can opt out, and the Supreme Court says Washington can’t twist their arms by withholding other funding.

Meantime, critics warn that running the exchanges could become an administrative nightmare, and that the exchanges would drive health insurance purchasers away from the private sector by providing far greater subsidies for those in the exchanges than for those who remain in employer plans.

Do the states really want to become mere midlevel subdivisions of a federal health care monopoly? “The idea that creating state exchanges would give states control over their insurance markets is a fantasy,” the EPPC scholars warn. Instead, the states would be enforcing a federal law and federal regulations, with little room for independent judgment.

Meantime, it’s far from clear whether Washington could operate the exchanges on its own. Congress didn’t allocate money for that, and the law, as written, seems to prohibit federally run exchanges from providing individual subsidies. Thus, states that refuse to create their own exchanges would effectively be repealing a large part of the law and sparing their citizens from the job-killing employer mandate.

Here in Nevada, the state Board of Examiners has already approved a $72 million contract to implement a Nevada health insurance exchange, funding a computer system that could start enrolling people by October 2013.

Gov. Brian Sandoval, a Republican, wisely said the program would need to become self-sustaining if it’s to continue. As a candidate, Gov. Sandoval opposed the federal health care takeover. Last year, he signed legislation creating Nevada’s insurance exchange, warning that he would oppose long-term funding if the exchange takes money away from other state programs or raises insurance premium taxes.

Good. By the time the state is scheduled to assume all operational costs – Jan. 1, 2015 – it’s estimated the computer system alone will start costing Carson City more than $18 million a year.

It’s an old story: The federal government dangles a few years worth of subsidies to get the states signed up. Then, a few years down the road, any attempt to pare it back is guaranteed to bring cries of “turning out the poor and the sick to die,” and we all get to line up for a tax hike – which is precisely what the U.S. Supreme Court said ObamaCare is.

The accompanying Medicaid expansion, meanwhile, would throw millions of additional Americans into a system that’s already bankrupting state governments and increasing costs in the private market. Geoffrey Lawrence of the Nevada Policy Research Institute, noting last week that Gov. Sandoval is pondering whether to expand Medicaid eligibility in Nevada, said any Medicaid expansion would mean reduced access to care for those currently enrolled.

Why? Fewer than 40 percent of physicians accept new Medicaid patients because the program pays bills at 40 cents on the dollar, or less. The doctors cover their losses by shifting costs to their non-welfare patients.

But what happens when there are no more non-welfare patients?

“It’s the same approach that has made care notoriously hard to come by in the ‘universal care’ programs of Canada and Great Britain,” warns Mr. Lawrence of NPRI. “In reality, Medicaid only guarantees access to a waiting list that is already over capacity.”

President Obama won re-election this month, but the states hold the future of ObamaCare in their hands. Knowing the harm the law would do to our citizens, the economy, and the quality of American health care, Gov. Sandoval should join with many of his colleagues and decline to become the enabler of a vastly expensive, European-style medical rationing system that poll after poll has shown most Americans do not want.