Governor Mary Fallin: No Health Exchange for Oklahoma

Today, Oklahoma Governor Mary Fallin sent a letter to HHS Secretary Sebelius indicating that the Sooner State will not create a state insurance exchange under the Patient Protection and Affordable Care Act. She wrote, in part:

“After careful consideration, I have today informed U.S. Secretary of Health Kathleen Sebelius that Oklahoma will not pursue the creation of its own health insurance exchange. Any exchange that is PPACA compliant will necessarily be ‘state-run’ in name only and would require Oklahoma resources, staff and tax dollars to implement. It does not benefit Oklahoma taxpayers to actively support and fund a new government program that will ultimately be under the control of the federal government, that is opposed by a clear majority of Oklahomans, and that will further the implementation of a law that threatens to erode both the quality of American health care and the fiscal stability of the nation.”

“Despite my ongoing opposition to the federal health care law, the state of Oklahoma is legally obligated to either build an exchange that is PPACA compliant and approved by the Obama Administration, or to default to an exchange run by the federal government. This choice has been forced on the people of Oklahoma by the Obama Administration in spite of the fact that voters have overwhelmingly expressed their opposition to the federal health care law through their support of State Question 756, a constitutional amendment prohibiting the implementation of key components of PPACA.”

Tenth Amendment Center communications director Mike Maharrey noted that refusing to implement exchanges in multiple states is a positive first step. “The feds depend on state cooperation to make these huge programs work. If a large number of states refuse to set these exchanges up, it puts and increasing burden on the federal bureaucracy, one I’m not convinced they are really prepared to deal with. Hopefully, it will lead to more aggressive action to block implementation down the road,” Maharrey said.

Maharrey noted that Fallin’s statement included something that other governors have been leaving out of their rejection letters to Sebelius, their state constitution.

“Governor Fallin, like all governors, take an oath to both the federal and state constitutions. Whether they think a particular policy is good or bad, sound economically or not, their decision-making is supposed to be based of their constitutional oath – and nothing more.”

Twelve states have passed a health care freedom act – by legislation or by referendum as a state constitutional amendment. Michael Cannon of the CATO institute has noted how these laws prohibit those states from supporting Obamacare in any way that helps the mandate:

In order to operate an exchange, state employees would have to determine eligibility for ObamaCare’s “premium assistance tax credits.” Those tax credits trigger penalties against employers (under the employer mandate) and residents (under the individual mandate). In addition, state employees would have to determine whether employers’ health benefits are “affordable.” A negative determination results in fines against the employer. These are key functions of an exchange.

Ergo, if the state passes a law establishing an exchange, then that law would violate the state’s constitution by indirectly compelling employers and individual residents to participate in a health care system. That sort of law seems precisely what the Constitutional Amendment exists to prevent.

It wasn’t just the exchange which Fallin has decided to oppose. Medicare expansion won’t be implemented in the state either:

“Furthermore, I have also decided that Oklahoma will not be participating in the Obama Administration’s proposed expansion of Medicaid. Such an expansion would be unaffordable, costing the state of Oklahoma up to $475 million between now and 2020, with escalating annual expenses in subsequent years. It would also further Oklahoma’s reliance on federal money that may or may not be available in the future given the dire fiscal problems facing the federal government. On a state level, massive new costs associated with Medicaid expansion would require cuts to important government priorities such as education and public safety. Furthermore, the proposed Medicaid expansion offers no meaningful reform to a massive entitlement program already contributing to the out-of-control spending of the federal government.”

Maharrey said Fallin’s concern with the lack of state control gets at the root of the problem.

“Nobody with an ounce of sense actually thinks that the same federal government that gave you the $600 toilet seat is going to effectively and efficiently run a health care system for 350 million Americans. But more importantly, it’s illegal for them to try. The Constitution delegates the feds no such power. States should block this thing on that principle alone,” he said. “Unfortunately, a lot of these governors aren’t willing to make that principled stand. But at least they recognize that a federally mandated and controlled system will be a disaster for their states, and they are taking steps to gum up the works.”

This summer, Oklahoma State Representative Mike Ritze announced that he would be introducing legislation to take things the next step – declare Obamacare unconstitutional and illegal within the borders of the state. Read that report HERE.

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