With the deadline for states to convey their intentions on Obamacare exchanges to HHS only days away at this writing, much attention is centered on what they will do. It is possible that half the states will decline to participate leaving the Feds alone in a task some think may not go well. The point that the States have the option of participation cannot be lost. The crafters of Obamacare were in some ways cognizant of the limits of Federal power and, thereby, sometimes reliant on willful submission and complicity to achieve their goals. In the past few weeks I’ve discovered that exchanges were not the only situation where Obamacare recognizes its potential limitations vis-a-vis the states, opening the door to the potential for significant new legal non compliance options.
On November 29 I received an email from Donna Rovito, fellow Pennsylvanian, National leader in healthcare freedom issues, and founder of the Lehigh Valley Coalition on Healthcare Reform. It included a link to a Citizens’ Council for Health Freedom (CCHF) page featuring commentary from its president Twila Brase. Her topic was a section of Obamacare that drew notice of at least one attorney at the Goldwater Institute. It’s found in Subtitle G – Miscellaneous Provisions, specifically Section 1555 which reads:
“No individual, company, business, nonprofit entity, or health insurance issuer offering group or individual health insurance coverage shall be required to participate in any Federal health insurance program created under this Act (or any amendments made by this Act), or in any Federal health insurance program expanded by this Act (or any such amendment), and there shall be no penalty or fine imposed upon any such issuer for choosing not to participate in such programs.”
The question raised was whether Section 1555 leaves individuals the right to opt out of Obamacare or is restricted to issuers of insurance, accepted as understood. I hope to show why this distinction is of minor concern.
Only a few more pieces of this puzzle need to be considered to understand its importance, mostly falling under the heading of what I’ve been calling the “other” complicity.
The other complicity is the unchallenged acceptance of Obamacare coverage mandates and regulations into policies as they even now exist before the exchanges are set to begin. This would include everything that defines how health insurance must look, from the phony deceptive “no cost sharing” first dollar mandates (including “free” contraception) to the age 26 requirement and bans on exclusion of preexisting conditions, from minimum loss ratio requirements to actuarial value restrictions and more. All this defining by the feds is in a direction 180 degrees from anything that makes sense and will add hugely to health insurance premiums within the exchanges. Michael Cannon at the blog Cato @ Liberty just presented some stunning information on the magnitude of these premium increases. We are looking at 30-40% and in some cases more.
While the Federal Government may be able to define the parameters of insurance within Obamacare there still exists a world outside, separate and apart, or at least there can and should. That world is the authority and responsibility of the states to regulate insurance sold within its borders granted to it by the McCarran-Ferguson Act of 1945. Under McCarran-Ferguson insurance was exempted from Federal anti-trust law and its regulation was left to the states, and remains in effect to this day. There is nothing about Obamacare that strips states of this right and insurance companies cannot claim that they are bound to participate in the dictates of Obamacare, as Subtitle G-Section 1555 makes clear they are not. Insurance companies were given the choice to partcipate, but states, through their insurance departments, and the authority of McCarran-Ferguson, reserve the right to require the continuance of non Obamacare compliant health insurance outside the exchanges, no matter what form the exchanges take. So long as states do NOT go for the purchase of health insurance across state lines, they have the defense, even in the face of the modern skewed interpretation of the Commerce Clause, to keep it this way. States must see Obamacare not as an imposition upon them but as a federal program layered over them for those who want it. They hold the keys to the maintainance of the availability of sensible health insurance policies, outside the federal program, firmly in their hands.
States, by using the authority they have, can even require a movement to true high deductible insurance where everything covered conforms to the deductible, among its choices outside Obamacare, thus setting the stage for many to pay the tax for non participation in the exchange, purchase sensible real insurance outside it, stash money into a HSA, and still have money left over in the end.
My take is that Obamacare is so reliant on willful complicity as to be a paper tiger that only gets teeth that are handed to it. All of the above along with the adoption of Healthcare Freedom measures as 17 states so far have, will determine how far states will permit the federal power grab that is Obamacare to go. A tradition of states exerting those powers they have needs to be rekindled, and there is no better time than now, on this issue, to do it.