How the States Can Carry the Torch to Repeal Obamacare

Kathryn Nix /

Last night, the House of Representatives passed H.R. 2, which would scrap Obamacare in its entirety. Regardless of whether this legislation makes it to the President’s desk, supporters of a new direction for health care reform have reason to be encouraged: Implementation of Obamacare faces an uphill battle in the states as well.

So far, 27 states have filed suit against the new law’s individual mandate and requirements forbidding states from reducing eligibility for their Medicaid programs. But the legal battle isn’t the only way states can throw a wrench in the health care overhaul. This week, the American Legislative Exchange Council (ALEC) debuts “The State Legislators Guide to Repealing Obamacare” highlighting ways in which states can continue the battle.

States face some of the most detrimental effects of the new health law. Obamacare significantly expands eligibility for Medicaid, and though the federal government will foot the bill in the first years of its enactment, in the end states still will be left picking up a portion of the cost.

This, however, doesn’t include administrative costs of expanding the program; nor does it consider the “woodwork effect.” According to ALEC, one out of every four uninsured Americans currently qualifies for Medicaid but is not enrolled. As these eligible individuals participate as a result of the new law’s requirement to carry coverage or pay a penalty, state costs will grow, but the federal government will not provide the enhanced matching rate.

States will also experience other negative economic effects of Obamacare. New penalties will threaten job creation, and states where life sciences industries employ a significant portion of the workforce may see jobs go overseas as a result of new taxes on drug and medical device manufacturers. Finally, Obamacare marks a federal overreach into insurance regulation, which has hitherto been overseen by the states.

ALEC provides strategies for state legislators to stop Obamacare, beginning with refusing to create the foundation required for the new law to take shape. ALEC’s Freedom of Choice in Health Care Act, which has been introduced or announced in 42 states, “prohibits any person, employer, or healthcare provider from being compelled to purchase or provide health insurance; protects the right of a person or employer to pay directly for lawful healthcare services; protects the right of a health care provider to accept direct payment for lawful healthcare services, and protects the existence of a private health insurance market.” States can also apply for waivers for certain insurance provisions, reject federal grants for implementation, and let Washington enforce federally created “consumer protections.”

Finally, state legislators should engage in careful oversight of the new law, commissioning outside reports on the effects of Obamacare at the state level. State lawmakers should hold hearings to highlight the unintended consequences of the new law, such as incentives for states to drop their Medicaid programs or businesses to drop employer-sponsored coverage. Drawing public attention to the negative effects of Obamacare will build the case for repeal.

Under Obamacare, states will be charged with enacting several provisions of the law without the flexibility to tailor changes to the unique demands of their residents. States can use this opportunity to fight for repeal and to empower state legislators to pursue the health care reform that best suits their needs.