Walker Stands Up for Taxpayers

Published January 18, 2012

Wisconsin Gov. Scott Walker’s recent decision to return to the federal government $37 million earmarked for the creation of a health insurance exchange is a wise and pragmatic decision that should be hailed as an example of carefully managing the taxpayers’ money.

Under President Barack Obama’s health care law, each state is required to set up a health insurance exchange, a bureaucratically managed portal for the purchase of insurance, by 2014. While being sold by the Obama administration as a marketplace, these exchanges will in reality be delivery mechanisms for expensive taxpayer-funded subsidies and top-down regulations from Washington, DC.

As deployed in Massachusetts, the combination of an individual mandate, taxpayer subsidies, and a government-run exchange created the nation’s most expensive health insurance premiums. Obama’s exchange is even worse, with massive restrictions on the ability of states to tailor the exchanges to the needs of their citizens, plus significant fiscal burdens on the states beginning in 2015. The exchange grant Wisconsin originally accessed is designed to be a carrot to tempt current officeholders, hoping they’ll ignore the future costs that await their constituents.

Recognizing this is fool’s gold, several states–including Florida, Kansas, and Louisiana–have not just halted implementation of an exchange but actually sent the taxpayer-funded grants back to Washington, saying “no thanks.”

In fact, only 14 states have decided affirmatively to implement an exchange, while 22 have rejected or halted the process–with most states preferring to wait for the results of the major legal challenges and a critical election this year.

This is the wise course, for a variety of reasons. The crux of the law, its individual mandate, is currently pending review by the U.S. Supreme Court thanks to a lawsuit brought by 28 states. The latest polling data indicate only 38 percent of Americans support the law and 80 percent oppose the individual mandate.

If the individual mandate is found unconstitutional, reforms will be unavoidable even under Democratic leadership–the health care law will need fixing in order to be workable at all. If Republicans attain leadership, they’re likely to push for full or partial repeal. Either way, the law is likely to change significantly.

Wisconsin legislators should not operate under the illusion that there is a difference between a state-operated and federally operated exchange. Either way, the buck stops with the Health and Human Services secretary, Kathleen Sebelius, who has near-total control over the system.

Another key element of exchange implementation–itself a difficult proposition given the compressed timeframe–is how to pay for it all once the grant runs out. Oregon has chosen a tax on insurance premiums of up to 5 percent. Is Wisconsin prepared to do the same?

Ultimately, Wisconsin lawmakers would take the heat for an exchange that’s state-level in name only. As Louisiana Health Secretary Bruce Greenstein explained when his state opted against implementation, “If we were to run it, it’d have the governor’s name on top of the letterhead for every letter to businesses and families announcing the increase in premiums.”

Spending taxpayer money on something that may be altered dramatically in the near future is nothing but a waste. And although Washington may claim this money is a grant or a gift, in reality it’s a little bribe for a big burden on future generations of Wisconsinites who will be forced to pay if the insurance exchange ever comes to fruition.

Gov. Walker’s decision isn’t just the choice of someone who is ideologically opposed to nationalized health care; it’s a smart decision to avoid wasting the taxpayers’ hard-earned money. For this, he should be applauded.

Benjamin Domenech ([email protected]) is a research fellow at The Heartland Institute and managing editor of Health Care News.