Nine Things States Can Do to Push Back Against Obamacare

Published May 31, 2016

States will be on the front lines in the battle against ObamaCare over the next two years as they lead the fight against this hugely unpopular law.

Newly elected state legislators and governors are facing a torrent of federal mandates to implement the new health overhaul law. But there are ways states can protect themselves from being swamped by these federal demands.

Here are nine things legislators can do to protect states against the destructive health overhaul law:

Set up only a minimal health exchange, using Utah as a model.

The federal government is demanding that state legislators get to work creating Health Insurance Exchanges that will be the mechanisms for strict federal regulation of health insurance and delivery of new subsidies in 2014. If they don’t, the federal government will move in and set them up. A minimal exchange will be a firewall against more aggressive federal intrusion.

Request a block grant for Medicaid.

Medicaid is already gobbling up resources for everything from public safety to education to transportation, and the law requires states to expand it to cover at least 16 million more people in families earning up to $30,000 a year.

States have been pleading for years for more flexibility so they can gain control over spending and be freed from federal micromanagement. They can follow the lead of Rhode Island, which was granted a waiver by the Bush administration in January of 2009 to receive its Medicaid funding as a block grant rather than a federal match. The result: The state saved $150 million in the first 18 months.

State Health Secretary Gary Alexander says the savings from Medicaid were “the sole reason why Rhode Island possessed a state budget surplus in 2010.”

Join the Florida lawsuit.

Consider having your state join 20 others in the Florida lawsuit challenging the constitutionality of the individual mandate and the authority of the federal government to treat the states like contractors in implementing ObamaCare in violation of the 10th Amendment.

Pass the Freedom of Choice Act.

At least 42 states have either passed or introduced legislation or amendments to protect their citizens from the federal law’s onerous “individual mandate.” Starting in 2014, everyone will be required to have government-approved health insurance or pay a fine. State law can help erect a firewall.

Request MLR waivers.

Immediately request a waiver from the feds for health insurers to escape the onerous Medical Loss Ratio rules that are going to drive many of them out of business. The federal government is dictating precisely how much insurers must spend on medical care vs. administrative costs. This is not workable, and it will put companies out of business, dry up competition and choices of policies, and put tens of thousands of insurance brokers out of work.

Get business waivers.

Encourage businesses in your state to request waivers from federal regulations that dictate what they must cover in employee health insurance policies, which already are causing costs to increase and threatening their ability to continue to provide coverage to workers.

Hold hearings.

Hearings provide an opportunity to educate citizens about the impact of the $500 billion in new taxes in the law on job creation and health costs, the impact of adding 16 million more people to Medicaid rolls, and how seniors will be affected by cutting $525 billion from the Medicare program.

Refuse to take federal grants involving insurance rates.

The health care overhaul law tries to lure states into helping set a new national definition of what constitutes “unreasonable” health insurance rate increases. At least 48 states have taken grants for Health Insurance Premium Review (Cycle I), which requires them to “improve” their premium rate review process. Cycle II would require states to agree to abide by the definition of “unreasonable rate increase” as set by the HHS.

According to Americans for Limited Government, “states that accept this grant would lose their authority to define what is unreasonable and would be bound by whatever definition HHS comes up with.”

Most importantly, do what works for your state.

If the law is ultimately repealed or declared unconstitutional, states will need to be ready with policies for the right kind of reform. Block grants for Medicaid and a lightly regulated exchange would be a good start.

States on the Front Lines

At the national level, a vote to repeal ObamaCare will be high on the agenda of the House of Representatives when the new Congress convenes in January. But the repeal bill will likely stall in the Democrat-controlled Senate and would certainly hit a brick wall with President Obama’s inevitable veto.

After the full repeal vote, the House will launch targeted votes to defund, delay, and dismantle, applying direct oversight and investigation. These steps will help the American people understand the details of the health overhaul law and its damaging impact on the health sector and the overall economy, especially job creation and health costs.

ObamaCare seems to have become a modern-day hydra—like the mythological creature that grew new heads every time one was cut off. But the opposition efforts can play the same game. The battles have only begun, and the states are on the front lines.

Grace-Marie Turner ([email protected]) is president of the Galen Institute. This column is adapted from an article on the institute’s website at