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Future of Idaho insurance exchange uncertain after Supreme Court ruling

Future of Idaho insurance exchange uncertain after Supreme Court ruling

Idaho Freedom Foundation staff
June 29, 2012

The U.S. Supreme Court's narrow 5–4 ruling Thursday in favor of the constitutionality of the major provisions of the Patient Protection and Affordable Care Act (PPACA) has left Idaho's leaders uncertain about the future of health care in the state. Although the court ruled that the commerce clause of the U.S. Constitution does not give federal authorities the power to compel citizens to purchase a product directly, it also decided that the PPACA, sponsored by the Barack Obama administration and popularly known as Obamacare, can require individuals either to purchase qualifying health insurance policies or to pay a punitive fine through the federal government's constitutional power to levy taxes.

"It looks like the Supreme Court has said it's OK to have a sneaky tax," said Lt. Gov. Brad Little. "They say, well, you can do it through this power to tax, but not call it a tax. And, of course, that grinds my core. Part of the problem is, we don't have enough transparency in government. We should be calling a tax a tax, so that the citizens who have an obligation to be informed and vote on their electorate understand what's going on."

The PPACA's provisions will require states either to implement insurance exchanges that serve as a clearinghouse for available coverage, or the federal government will set up its own exchange instead. Although Gov. C.L. "Butch" Otter had pushed for the creation of a state exchange during the recent legislative session, legislators tabled the proposal pending a Supreme Court decision about constitutionality of Obamacare. Legislators now have to decide whether to press ahead with the creation of an Idaho exchange or to leave decisions about what it will entail in the hands of the federal government.

"I've been saying all along that if we participate in a federal health exchange, one that's run for multiple states, it will likely be more expensive for the individuals and the businesses than if we run it ourselves," said House Minority Leader John Rusche, D-Lewiston. "We have a relatively advantageous cost profile. Turning it over to the feds is not likely to make that better."

Others, however, hope to fight back against the law altogether.

"I'm firmly against the exchange," said Rep. Vito Barbieri, R-Dalton Gardens. "I do not know how, at this point, the state can begin to resist the federal government with respect to this particular bill now that it's been determined that it's a tax. It's astounding to me that the Supreme Court could come to that conclusion. I mean, I could argue that the state can be the last arbiter of whether or not a law is constitutional. But when it comes to a tax, there's no way that we can protect the citizens from a federal tax. So, given that we have no way to protect our citizens from the tax, we've got to figure out another way to begin to protect the taxpayers from the increase in Medicaid costs that this bill is going to require."

U.S. Sen. Jim DeMint, R-South Carolina, issued a press release following the decision urging states to refuse to implement Obamacare. If state governments follow his lead, it could result in a de facto nullification of the federal law.

"I urge every governor to stop implementing the health care exchanges that would help implement the harmful effects of this misguided law," he wrote. "Americans have loudly rejected this federal takeover of health care, and governors should join with the people and reject its implementation."

Varying levels of dissent regarding the provisions of the PPACA are so widely represented among Idaho's leaders that regardless of the path that Idaho's leaders choose to follow going forward, it is likely to be a rocky one. Gov. Otter released a statement today indicating that he intends to lead the fight.

"Although five Supreme Court justices upheld Obamacare and the individual mandate under Congress’s power to tax, it does not mean it’s the right thing to do," Otter wrote. "Obamacare has been bad for America from the beginning. This is a sad day for self-determination and for individual liberty. Change is now in the hands of the American people and we must elect a new president and congressional candidates who will repeal Obamacare and protect our freedom to remain the architects of our own destiny."

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