Massachusetts Daily Collegian

A free and responsible press serving the UMass community since 1890

A free and responsible press serving the UMass community since 1890

Massachusetts Daily Collegian

A free and responsible press serving the UMass community since 1890

Massachusetts Daily Collegian

States reject federalism in attempt to nullify ACA

Justin Sloan/Flickr
Justin Sloan/Flickr

President Obama modified the Affordable Care Act last week, allowing insurers to offer non-compliant individual health plans through 2014. This was the latest in a series of compromises, from the religious exemption to the removal of the public option, made by the Obama administration on its signature achievement both before and after the law was passed. Pundits scream in unison that this latest compromise and the delayed rollout of, the federal individual insurance marketplace, spell doom for both the ACA and Obama.

Under the framework of the ACA, individual marketplaces were to run on the principle of federalism — that the states would run their own programs under federal guidelines. However, 36 states opted not to run their own marketplaces, leaving that responsibility to the federal government, and thus we have This amounts to a modern nullification of federal law by the states, which Merriam-Webster defines as, “the action of a state impeding or attempting to prevent the operation and enforcement within its territory of a law of the United States.”

The non-compliant individual plan exemption lasts for one year, and many states are not exempting insurers from the ACA quality requirements because they have already implemented the federal rules in state laws and regulation.

While is improving, hundreds of thousands of uninsured citizens have enrolled in plans through the 14 state-run individual marketplaces. In Connecticut, Anne Masterson reduced her monthly premiums from $965 to $313, with an annual premium savings of $8,000. That marketplace has 96.5 percent consumer satisfaction.

Peter Lee, director of state marketplace Covered California, says, “What we are seeing is incredible momentum.” Over 31,000 people enrolled in October, and nearly double that enrolled in the first two weeks of November. The delay in enrollment is mostly due to IT problems, which professionals have smoothed out in most state-run marketplaces.

The state-run exchanges are helping small businesses too. Brad Camp, a business owner from Washington, visited the state exchange after receiving a cancellation notice. He found a new plan with better coverage and will receive tax credits to cover the costs. In Kentucky, business owner Howard Stovall pays half the cost of his employees’ plans. With his new plan from Kynect, the state’s exchange, his employees are saving between five and 40 percent for new plans with better benefits. The business saves over 50 percent as well.

If more states had set up and run their own exchanges, the IT problems faced by in the Oct. 1 rollout of the online marketplaces would not have been debilitating.

While the ACA is a major reform, health care spending accounts for 17.9 percent of the U.S. economy, according to the World Health Organization. The private individual insurance market is small in comparison. Most people will never have to use because most health care is employer-sponsored, with over 59.5 percent of insured Americans receiving insurance from their job in 2013, according to the Robert Wood Johnson Foundation. The only major change to employer-sponsored plans is the ban on rejecting patients based on preexisting conditions and allowing dependents to stay on their parent’s insurance plan until age 26.

In addition, 34 percent of the insured population had public insurance in 2010. Fourteen percent had Medicare, 15.9 percent had Medicaid and 4.2 percent had military health insurance, according to data from the 2010 census. Less than 10 percent of the insured population purchases insurance on the individual market.

With the knowledge that states run by ideologically anti-government politicians may reject an expansion of Medicaid, the ACA originally mandated that states expand Medicaid or lose all funding for their current Medicaid program. By challenging this in the courts and appealing to the conservative-majority Supreme Court, which found that mandate coercive, 25 states, many of them with the largest uninsured populations, have opted not to expand Medicaid, leaving 5,161,820 uninsured people in a coverage gap.

Meanwhile, Washington opted to expand Medicaid because it will save the state $300 million over the first 18 months and create 10,000 jobs. Kentucky did the same, with the expectation that the expansion could create 17,000 jobs.

The ACA is not a complicated piece of legislation simply because it happens to be technical and verbose. The legislation is complicated because of the complex realities of our economy. Trying to regulate a private market to achieve better health outcomes is complicated because the free market does not inherently maximize positive health outcomes — it maximizes profits.

When talking about a policy, the most important question to ask is: What outcome do we want to achieve? For health care, it has to be keeping people healthy and making sure that sick people get healthy in safe and cost-effective ways. If it’s maximizing firm profits by providing coverage to as many healthy people as possible, fighting tooth-and-nail on most claims and offering plans with bare-bones coverage, the system will not function well for many consumers.

The ACA attempts to make insurers, hospitals and some consumers pay externalized costs in order to provide better health care for more people at a lower price. If parts of the law do not complete this mission, then Congress should reform them. The fundamental structure of the law will help reduce costs. We have a law and the structure outlined by private market. Parts of the law may be flawed, but it will not be nearly as bad as insurers throwing individuals off of plans, the already sick unable to get any coverage and the only “affordable” plans offering little or no meaningful coverage.

If all 50 states had faithfully executed the core insurance-expanding provisions of the Affordable Care Act by creating a state individual marketplace and expanding Medicaid, health care cost reduction would increase faster than its present rate. But by nullifying these provisions, states have impeded the rightful authority of the federal government to regulate the health insurance marketplace. While the spirit of federalism may be that states make their own decisions, federalism in the 21st century functions as a state-federal partnership. State and federal governments must work closely to best represent the needs of states as well as use the federal public debt to finance public investment.

State and federal governments must act in good faith toward each other for our federalist system to function. The “failure” of the Affordable Care Act will be moot in a few years when compliant states see reductions in health care costs, and as more states that are non-compliant begin to accept reform, reducing costs even more.

That does not forgive the embarrassing nullification of the ACA by many states since 2010. When the voting base of the “party of markets” makes it impossible for that party to accept market-based policy solutions, the party clearly has a major political problem — they just need to stop taking their troubles out on American citizens.

Zac Bears is a Collegian columnist and can be reached at [email protected].

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  • C

    CrhNov 26, 2013 at 3:26 pm

    Obamacare is not “left-wing”. It is based on Romney’s Republican health reform in MA, and it is more right-wing than the health care systems of Canada, Britain, France, Germany, the Nordic countries, Japan, Australia, and pretty much every other first world country on the planet.
    A health care law that is slightly to the left of what we had before but still to the right of the entire First World does not qualify as a “left-wing” or “liberal” (let alone “socialist”!) health care law. Obamacare is a less-conservative-than-before health care law.

  • Z

    Zac BearsNov 25, 2013 at 5:26 pm

    Hundreds of thousands of people have signed up on the state-run exchanges.

  • B

    BenNov 24, 2013 at 1:42 pm

    Zac, hundreds of thousands of people have not signed up through I don’t know who told you that. More people have been thrown off their policies–that they were promised they could keep–than have signed up through

    The “religious exemption” you speak of is so narrow that even Jesus and the 12 apostles wouldn’t qualify. Obamacare thoroughly thrashes religious liberty. It’s frankly unconstitutional. Thankfully, the courts are siding with religious liberty and not with Obama.

  • Z

    Zac BearsNov 20, 2013 at 3:10 pm

    Because there is no such thing as a person over the age of 25 who is a liberal? Explain Barack Obama and Bill Clinton to me. Explain the 50%+ Americans who voted progressively.
    American values are ones of equality of opportunity, the capability to use liberty, the right to fulfill one’s happiness. I’m not a utopian. I don’t believe that the “state” can solve every problem.
    I do believe that economic theory justifies the intervention of the government to ensure social welfare and competition. The health “market” fails its consumers and they have no alternative. Groceries and clothing stores do not. That is why I support government intervention in health care and not supermarkets.
    Next time you want to belittle an entire ideology just because you are afraid that you are going to have to pay more taxes and will lose what is “rightfully yours,” take it somewhere else.
    Unless you pay the government every time you use a road, go to a park, send your kids to school, use a bus, etc… then you owe the government money for the services they provided for you at a non-market price. Unless you want to pay market price for government services, rethink your argument.

  • H

    Howard SachsNov 20, 2013 at 10:16 am

    Zac: Thanks for your thoughtful and well written piece. I thought through it. With respect, I and millions of Americans disagree with your basic beliefs. You are obviously a supporter of the value system of Leftism. It has almost nothing in common with American values. Leftism argues goodness and kindness,wealth and compassion are brought to the world under State control. American values are the antithesis of this value system. It says all of these things are brought best to societies with capitalism, individual freedom and limited Government. This Obamacare that you laud so much has tens of thousands of Government workers, guided by now 15000 pages of laws to regulate every hair on your head, your two lungs and heart,liver and reproductive parts. All this people who don’t know you and honestly don’t care a whit about you will be telling you in no uncertain terms where , when how and by whom you get care- all in the name of “social justice and equality for all.” And Zac. Its not like in the private free market world where you can say “screw you Blue Cross, I’m going to another company.” All you will be able to do when the flat voiced bureaucrat tells you you cant get this drug or that therapy will be to write a letter to your kind compassionate congressman waiting to hear your complaint. What a world you support Zac!

    What it will bring is terrible degradation of one of the best medical system in the world.

    Leftism is a wealth destruction machine. It is a Liberty destruction machine and now its a health destruction machine. And people like you cheer for more of this Marxist based Hope and Change. You actually should be ashamed as an American to support such notions. But its not until people like you get out into the real world beyond the bubble of the kindercollege and face up front the realities of life that you start thinking about American values again. Its then when the majority of you become conservative-when you see the destructiveness of Bog Government in your life. Good luck. I comment with respect. I too used to be a young utopian Leftist college student. Like Margret Thatcher said, “reality is being a conservative.”

    And one more small question of you Zac. Why may I ask if kind and caring Government is so good at bringing compassion and social justice and bounty and excellence to 300 million of us in medicine, why aren’t you writing essays about how we must do that for things just as vital like food, and clothing and housing. Why not go out and work and send most of your money to Washington fighting for the idea they’ll open up some Government Supermarkets and Clothing stores and Condos so you can live in an even better America Zac? Please don’t respond that medicine is different than buying bananas and bread. Its not in any true economic and moral sense.

    Good luck to you. I hope you someday return to American values and drop this regressive, old, worn and discredited value system you hold called Leftism. regards: Howard Sachs/ Washington DC [email protected] 301 7752177