Alien Space Bats wrote:Llamalandia wrote:But what you suggest would require state cooperation, many states would still refuse to participate. Your argument might have merit for those states that tried and ultimately failed at building there own exchanges perhaps but it still seems to me to be a bit of a stretch.
Now you get to the heart of what's at stake here.
States like Texas and Georgia that have fought the ACA could declare that they don't have a State exchange and effectively deny their residents access to Federal subsidies, thus screwing their lower-income residents over by pricing them out of the health insurance market and so subsequently making them pay the required tax instead.
On the other hand, states like Michigan and Illinois that have elected to use the Federal exchange while also expanding Medicaid would still be able to partner with the Federal government, simply by saying that they're using the Federal Marketplace servers and software architecture to host "their" State Marketplaces.
The thing is, only seven States use the Federal Marketplace for their State insurance exchanges: Michigan, Illinois, West Virginia, Delaware, New Hampshire, Arkansas and Iowa. So the question arises: Will the loss of the other 27 States that use the Federal Marketplace in one form or another result in the collapse of the Federal exchange.
The answer, I believe, is no. Because insurance is sold by carriers licensed within each State for sales within each State, each State market essentially stands (or falls) on its own. Using my home State of Michigan as an example, the failure of Texas to allow its lower-income taxpayers to purchase insurance on the Federal exchange won't impact Michigan insureds at all (unless it results in the failure of one or more companies that do business in both States, or so distresses one or more carriers to the point where they have to raise premiums in Michigan in order to continue to operate — and that seems unlikely).
Where the impact WILL be felt is on in those States that cut off access to Federal premium subsidies. These States will be hurting themselves in two significant ways:In essence, we will have two Americas, and will get a case study in the effects of the ACA: In one America, most people will have insurance and (as demand pushes business expansion) more and better healthcare; likewise, businesses in these States will be better able to insure their employees than in the other America.
- First, they'll be increasing the Federal tax burden on their lower-income citizens (and on many of their smaller businesses) without a corresponding tax cut to balance the scales from a macroeconomic POV; that will depress business activity within these States both by taking money away from consumers (and consumers who are generally iclined to spend everything they take in as is, increasing the multiplier effect from said tax increase) and by increasing operating costs for their smaller to medium-sized businesses (which will hurt these businesses competitiveness). In comparison, States that embrace both the Medicaid expansion AND the Marketplace will enjoy both a fiscal stimulus and a competitive advantage from a business expansion from their decision to do so.
- Second, thanks to the termination of subsidies to emergency health care providers (for the treatment of uninsured individuals), such States will suffer even greater business failures within their State healthcare industries due to uncompensated care losses (as well as a reduction in paid business from lower-income families no longer having affordable access to health care, and thus no longer going to the doctor for care [including specialty care, which is where many of these health care providers make the bulk of their profits]). Lower profits and higher costs will result in a contraction within each of these States' healthcare industries, further exacerbating their macroeconomic woes while driving up healthcare costs due to supply-side pressure. These two effects will then snowball, damaging businesses and driving both healthcare costs and insurance premiums up further over time — exactly as would have happened naturally across the US had the ACA not been enacted.
And that other America? It will end up with an increasingly small number of insured individuals, far fewer jobs that offer insurance, far fewer health care providers, and much poorer health care outcomes. To survive economically, it will have to function as the other America's China: A low-wage provider of "exports" with poor health and a poorer overall standard of living. The only wrinkle is that it will also be paying a goodly chunk of the wealthier America's healthcare.
It's never really been about whether or not obamacare works though, I mean not fundamentally speaking anyway. Rather it is about the principle of the thing, to we want the govt telling people how to live their lives or do we want to let people make their own decisions. Now I know that most people are pretty freaking stupid and make pretty bad decisions but that doesn't mean they don't have a right to make those decisions.
