November 9 2012

The Future of ObamaCare: Not that Healthy?

Charlotte Hays

Is ObamaCare here to stay?

Peter Suderman poses that question in Reason magazine.

Despite having a high disapproval rating, ObamaCare withstood the 2012 presidential election. No matter how much voters may dislike it, Barack Obama has that veto pen for the next four years.

But Suderman argues that, while ObamaCare may remain on the books in the near future, there remain serious legal and practical hurdles to implementation:

Tops on the list are challenges to the law’s insurance exchanges, starting with a lawsuit filed by Oklahoma’s attorney general. That case, which revolves around legal problems examined in a paper by Case Western Reserve law professor Jonathan Adler and Cato Institute Health Policy Direct Michael Cannon, may decide whether employers in states that do not set up their own health insurance exchanges can be taxed under the law, as well as whether it is legal for the federal government to offer insurance subsidies through exchanges it runs in states that opt out. The law, which taxes employers that don’t offer insurance in order to fund those subsidies, states that subsidies are only available in state-run exchanges.

If Oklahoma’s suit prevails, states will have a large incentive to opt out of creating exchanges in order to protect employers from the tax penalty. And the federal exchanges will be largely useless. “No one would go to those exchanges. The whole structure created by the health care reform law starts to fall apart,” Gretchen Young, senior vice president-health policy at the ERISA Industry Committee told Business Insurance.

Added to this, the federal government doesn’t have the money to set up the federal insurance exchanges established on paper by the law, and the state exchanges are lagging, too. Suderman on why these exchanges are in trouble is well worth reading.

Still, don’t count on ObamaCare falling of its own weight quickly. Indeed, Suderman says it is “delusional” to believe this will happen. But I’m not convinced: sure, once something is on the books, it’s hard to remove it. But few are going to be better off as a result of ObamaCare, and many will be much worse off because of the law. This will become apparent sooner rather than later.

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