Under the mandates of Obamacare, states are required to implement healthcare exchanges, which are online health insurance shopping centers for state residents and small businesses. This is where they will sign up for a healthcare plan, in accordance with the dictates of federal healthcare law. They can declare one of 3 options for these exchanges – a pure federal plan (HHS sets it up), a state-federal plan, or pure state plan. Health and Human Services (HHS) Secretary, Kathleen Sibelius, has set deadlines for each of the options. For example, the deadline for states who want to run their own exchanges (pure state plan) was Friday, November 16 (but extended by Sibelius to December 14). For those states opting for the state-federal plan, the deadline is February 15, 2013.
Our NC State Legislature, as I understand it, had considered the state option and in fact, it passed the House. But it failed to pass the Senate after an independent report looking into the feasibility of the option concluded that it could not be done. There would not be enough time to set it up and get it running here in NC. And that’s where things stood. It was anticipated that the healthcare bill would be repealed with a Romney-Ryan victory and we wouldn’t have to be concerned with its implementation. But that wasn’t what was written in the stars. The re-election of President Obama has put Obamacare back at center stage. And so, despite a deadline of February 15, Governor Beverly Perdue went ahead on Thursday, November 15 and sent a letter to Sec. Sibelius declaring that our state of North Carolina will opt for the hybrid state-federal healthcare exchange plan. She claims the new state legislature will have the ability to stick with that option or decide that they want a pure federal plan. What does newly-elected Governor Pat McCrory think? (see News & Observer article below)
The states are faced with a dilemma, including North Carolina: Whether to acquiesce and accept that this bad bill and unconstitutional Supreme Court decision is “the law of the land”, or, to keep protesting and challenging the government’s authority to force its will on the individual states even when the area it wishes to legislate is one reserved to the states? And so, that is being played out at the state level, through the opting out of the healthcare exchanges and the consideration of nullification bills and state constitutional amendments. On November 6th, the people of 3 states voted to add an amendment to their state constitution nullifying the federal healthcare Individual Mandate – Montana, Wyoming, and Alabama. Florida narrowly failed to pass its Obamacare nullification amendment – by only 1% of the vote. [See: http://www.ncsl.org/issues-research/health/state-laws-and-actions-challenging-ppaca.aspx]
So far, 17 states have opted out of the state healthcare exchanges mandated by Obamacare – Alabama, Arkansas, Georgia, Indiana, Iowa, Kansas, Louisiana, Maine, Missouri, Nevada, North Dakota, Ohio, Texas (of course!!), South Carolina, Virginia, Wisconsin, and Wyoming.
“To consider the Judges of the Superior Court as the ultimate arbiters of constitutional questions would be a dangerous doctrine which would place us under the despotism of an oligarchy. They have with others, the same passion for party, for power, and for the privileges of their corps – and their power is the most dangerous as they are in office for life, and not responsible, as the other functionaries are, to the Elective control. The Constitution has elected no single tribunal. I know no safe depository of the ultimate powers of society but the people themselves.”
— Thomas Jefferson
“The germ of dissolution of our federal government is in the federal judiciary – an irresponsible body, working like gravity by night and by day, gaining a little today and a little tomorrow, and advancing its noiseless step like a thief, over the field of jurisdiction until all shall be usurped from the States, and the government of all be consolidated into one. To this I am opposed; because, when all government, domestic and foreign, in little as in great things, shall be drawn to Washington as the center of all it will render powerless the checks provided of one government on another and will become as venal and oppressive as the government from which we separated.”
— Thomas Jefferson, in a letter to Charles Hammond, August 18, 1821
“Why is patriotism thought to be blind loyalty to the government and the politicians who run it, rather than loyalty to the principles of liberty and support for the people? Real patriotism is a willingness to challenge the government when it’s wrong.” — Rep. Ron Paul
The NC Tenth Amendment Center is working very hard to change the culture in Raleigh to one that would make our founding state leaders proud and honor the rightful expectations of citizens who just want the freedom to be “left alone” by government (Supreme Court Justice Brandeis) and to feel like their state is still part of “The Land of the Free” that was bequeathed to us by the blood and sacrifice of those who fought for her ideals. I would suggest that everyone do what I do from time to time – read the debates in the North Carolina Ratifying Convention of 1788 for a stark reminder of what the interests were of our state in establishing a federal government. Please check out the NC Tenth Amendment for initiatives and projects.
STATUS: (as of November 16, 2012)
Despite President Obama’s victory, several Republican governors have announced that they would not set up state healthcare exchanges from which residents can select a health care plan, a requirement of the federal healthcare law, affectionately (or disaffectionately) referred to as “Obamacare.” Even though Obama’s re-election made the Affordable Care Act the law of the land and any refusal to set up the exchanges is likely to be only symbolic, they say will not cave in to its mandates. Obamacare requires all states to either set up their own exchange or leave that job to the federal government. Furthermore, it requires the exchanges to be self-sufficient by 2015.
Florida was the first state to announce it won’t participate in the exchanges and Louisiana was the second state. [However, now we hear that FL Governor Rick Scott may try to implement a state-based exchange ” but only if he can find a way to pay for it that doesn’t increase health costs or state taxes.” Note that before election day, Scott was adamant that the state would do nothing to implement the health law that was not required].
On November 15, South Carolina governor and rising Republican star Nikki Haley sent a letter to Sebelius on saying that South Carolina “should not and will not set up a state-based health care exchange.” Several other Republican governors, including Louisiana Gov. Bobby Jindal, a GOP leader who is frequently cited as a potential candidate in 2016, and Alabama Gov. Robert Bentley announced that their states would also not set up an exchange. “I am not going to set up a state-based exchange that will create a tax burden of up to $50 million on the people of Alabama,” Bentley said Tuesday.
Louisiana Health Secretary Bruce Greenstein said Louisiana will return a $1 million federal grant it received to help set up the exchanges, which are designed to create a regulated marketplace where individuals and small businesses can buy subsidized private coverage. Louisiana’s decision means the federal government will administer an exchange when the law takes full effect in January 2014.
Greenstein said that insurance premiums are likely to rise under the new law, and he does not want state regulators or Gov. Bobby Jindal to be blamed if that occurred. “Envision an exchange which, if we were to run it, has the governor’s name on top of the letterhead,” Greenstein said. “We know we would see a number of letters that would go out to businesses and families throughout the state announcing the increase in premiums.”
Other states where the governors have made similar declarations include Kansas, Alaska, and Wisconsin. In Missouri, the Democratic governor announced on November 15 that the state would not set up an exchange either, but that announcement resulted from a ballot measure that forbade the governor from moving forward with an exchange without the approval of the state’s legislature, and Republicans control Missouri’s state legislature. Wisconsin Gov. Scott Walker rejected $38 million in federal money that had been allocated to pay for implementing the law, in anticipation of a Romney victory. On November 16, he announced that his state would not set up a healthcare exchange.
Critics of Walker’s decision claim that by not setting up its own (state-based) exchange, Wisconsin will lose control over several key decisions over how easily consumers will be able to compare insurance plans, what plans can be sold through the exchange, what the plans must cover and their cost. But a resolute Walker said his motivation was protecting Wisconsin taxpayers from being saddled with costs for running the exchange years down the road, which he estimated could be as much as $60 million a year.
Like Wisconsin’s Governor Walker, Virginia’s Governor Bob McDonnell was also convinced that Romney would be elected and Obamacare repealed. While McDonnell feels the pressure that his state must comply with the healthcare law, he doesn’t know which plan is best for his state. And so, along with LA Governor Jindal, McDonnell wrote a letter to President Obama on behalf of Republican Governors, asking for an extension of the deadline for states to declare whether they will run their own exchanges, create a partnership exchange or default to a federally-run exchange. In it, they argued that the deadlines and many provisions of the Patient Protection and Affordable Care Act “are simply unworkable.” The letter also complained that Obamacare does not include “much-needed Medicaid or Medicare reform designed to control costs.”
Republican governors of Alaska, Indiana, Nebraska, Texas, North Carolina (we finally got one !) and South Carolina joined in the letter. They said they will not set up exchanges, joining at least 20 states where the federal government will have to do all or most of the work. “As has been stated many times, before making any final policy decisions, governors must carefully consider the short and long-term implications of an expanded entitlement program and the consequences of significantly increasing the size of government to manage these programs,” the letter states. If forced to do so, they will likely not set up state healthcare exchanges (joining at least 20 other states which will have federal plans) and opt to let the federal government do all the work …. and take all the blame.
So what do these refusals mean for the future of the health care law? Not much, it seems, as the health insurance exchanges will be set up in these states anyway.
Under the law, if a state falls behind or opts not to set up the exchange, the federal government, specifically the Department of Health and Human Services, steps in and sets up the exchange. That would not likely be well-received by Republican governors either, but the law forces each state’s executive to make a decision one way or the other. “If the state decides not to establish an exchange, then the federal government establishes the exchange for them. So it’s kind of a pick-your-poison scenario, if you will,” said Renee M. Landers, a professor of law at Suffolk University Law School in Boston.
The potential for state executives to opt out of this portion of the law had been anticipated for some time. Almost immediately after the Supreme Court announced its ruling on the Affordable Care Act last June, several governors, including Jindal and Walker, said they would wait until after the election to take any sort of action on the law.
House Republicans who have voted to repeal the law appear unlikely to try again. House Speaker John Boehner, Ohio Republican, told ABC-TV on Thursday that the president’s re-election means “Obamacare is the law of the land.” However, he said parts of the law are going to be expensive and difficult to implement.
NC’s Healthcare Exchange Will be State-Federal Partnership
by News & Observer, Nov. 15, 2012. http://www.newsobserver.com/2012/11/15/2485906/ncs-health-care-exchange-will.html
Raleigh — The federal government and the state will share the responsibility for setting up a health care exchange in North Carolina, Gov. Bev Perdue announced Thursday.
The exchanges, online health insurance shopping centers for individuals and small businesses, are required under the new federal health insurance law but many states didn’t prepare for the exchanges, hoping for a repeal of the law. Last year, a consultant estimated that about 700,000 state residents would find health insurance coverage through the exchange in 2014. The state has three options for a health care exchange: have the federal government set it up, have a state-run exchange, or a hybrid state-federal exchange. Perdue said she would have preferred a state-operated exchange, but chose the intermediate course so that Gov.-elect Pat McCrory and the legislature can make a future choice to go to a fully state-run or to a federally run exchange.
Republican leaders had mixed responses to the decision, with the Senate leader saying the lame-duck governor should not have acted. But McCrory acknowledged that Perdue’s decision keeps the state’s options open, but he did not say what kind of exchange he would prefer. “Governor Perdue’s decision leaves flexibility for North Carolina in the future when it comes to the delivery of health care,” McCrory said in a statement. “I will be discussing this with more governors today, and will continue those discussions in the coming weeks to ensure the best results for North Carolina.” McCrory is at a Republican Governors Association annual meeting in Las Vegas.
Senate leader Phil Berger blasted Perdue for making a decision on an important issue that he said should have been left until McCrory takes office. “Let’s set the record straight – it is not necessary or appropriate for Gov. Perdue to prematurely declare her intent to establish a state-federal partnership exchange,” the Eden Republican said in a statement. “The initial deadline for the state to make this declaration is February 15, 2013 – three months from today. The voters elected a new legislature and governor last week and policy decisions of this magnitude should be left to them.”
Berger said he did not object to the state applying for federal grants to pay the state’s costs “as long as it does not frivolously spend the tax dollars until the new leaders determine the next steps.”
The states are required to submit “Declaration Letters” with HHS Secretary Kathleen Sibelius to declare which healthcare exchange option they will implement – the federal plan, a state-federal plan, or a state plan. The federal government had a series of deadlines for states declaring what kind of plans they want, submitting plans, and applying for grants. For those states opting to run their own exchanges, the deadline was Friday, November 16. (but extended by Sibelius to December 14). For those states opting for the state-federal plan, the letter is due February 15, 2013. Today was the deadline for states to apply for federal grants.
The state Department of Insurance submitted an application for a $73.5 million federal grant to pay for state-based consumer assistance, reviews of health plans’ qualifications and business practices, and technology. Some Republican governors, opposed to the health insurance law, have opted out of the healthcare exchanges in their states. Other states delayed their decisions awaiting the outcome of the U.S. Supreme Court decision on the law, and then the presidential election. Republican presidential candidate Mitt Romney promised to repeal the law. The conservative group Americans for Prosperity (AFP) has been pressuring Republican governors to not set up state-run exchanges. Dallas Woodhouse, AFP state director, said in a statement it would work to undo the exchange after Perdue leaves office.
Earlier this week, the Associated Press reported that some Republican governors, including one of the exchange’s most vocal opponents, Rick Scott of Florida, are shifting toward acceptance. Scott told the news service he wants to negotiate with the federal government to help the nearly 4 million uninsured people in his state, saying “if I can get to ‘yes,’ I want to get to ‘yes.’ ”
Perdue’s options were limited. Proposed legislation last session that would have allowed for a state-run exchange stalled in the state Senate after passing the House. A consultant’s report from August said the state didn’t have enough time to set up its own exchange and get it running on time. Without a law permitting the state-run exchange, the state-and-federal exchange was the next best option, said state Insurance Commissioner Wayne Goodwin, a Democrat. But the state should move to run its own exchange, he said, so state residents won’t have to dial out-of-state call centers for help and to keep the federal government from controlling a large segment of the state insurance market. “We should not be handing the keys to state sovereignty, especially over health insurance regulations, to the federal government when North Carolinians know what’s best for North Carolinians,” he said.
“Healthcare Law: GOP Governors Opt Out of Healthcare Exchanges,” ABC News, November 15, 2012.
Referenced at: http://abcnews.go.com/blogs/politics/2012/11/health-care-law-gop-govs-opt-out-of-state-exchanges/
Jan Moller, “Louisiana to Opt Out of Healthcare Insurance Exchanges in Federal Law, ” The Times Picayenne, November 23, 2012. http://www.nola.com/politics/index.ssf/2011/03/louisiana_to_opt_out_of_health.html
Jeffrey Young, “Health Insurance Exchanges Deadline Extended As More Governors Opt Out,” Huffington Post, November 15, 2012. Referenced at: http://www.huffingtonpost.com/2012/11/15/health-insurance-exchange-deadline_n_2140454.html
“Rick Scott Ready to Cave In On Health Insurance Exchange and Medicaid Expansion?,” Daily Kos, November 16, 2012. Referenced at: http://www.dailykos.com/story/2012/11/16/1162395/-Rick-Scott-ready-to-cave-on-Health-Insurance-Exchange-and-Medicaid-expansion#
“Walker Says Wisconsin Won’t Set Up Health Exchange,” November 16, 2012. Referenced at: http://www.greenbaypressgazette.com/viewart/20121116/GPG0101/311160331/Walker-says-Wisconsin-won-t-set-up-health-exchange?odyssey=tab|mostpopular|text|GPG05
“McDonnell, GOP Governors Want More Time on Health Exchange Options,” November 14, 2012. Referenced at: http://blogs.roanoke.com/politics/2012/11/14/mcdonnell-gop-governors-want-more-time-on-health-exchange-options/
Diane was born in New Jersey and lived there most of her life. She attended Seton Hall University School of Law where Judge Andrew Napolitano was her constitutional law professor.She and her family moved to Greenville, NC in 2001.She is married and has 4 children.
Latest posts by Diane Rufino (see all)
- Nullification: The Power to Right Wrongs - July 22, 2015
- The Supremacy Clause and Proper Constitutional Bounds - August 27, 2013
- Why Nullification? - August 26, 2013