Governor Bill Haslam recently announced he plans to put off the decision on whether to form the health care exchanges outlined in the Patient Protection and Affordable Care Act, also known as Obamacare, after HHS Secretary Kathleen Sibelius extended the deadline for states to notify the federal government until Dec. 14.
No doubt, the governor is getting significant pressure from both sides of the exchange fight, with insurance company lobbyists emphasizing that they’d prefer to work with the state government instead of the federal government, while individual citizens and employers are mounting a lobbying effort of their own against the exchanges.
One has to wonder if perhaps Haslam isn’t waiting in the hope that Tennesseans will be too occupied with candy canes, turkey, and holiday festivities to notice what their state government is doing.
The Patient Protection and Affordable Care Act does NOT require the states to run an exchange. If any state does not set up its own exchange, the federal government will set up an exchange on its own. The problem with this, of course, is that the federal government does not have enough money or manpower to run exchanges in all 50 states. That is only one of many reasons that the federal government is pushing the states to create exchanges.
So far, 20 states have given official notice that they are refusing to create the state-run exchanges. It’s not as if Haslam has to go out on a limb by himself in refusing to create a state-run health care exchange. With governors all across the U.S. refusing to implement exchanges, there is no courage required for him to go along with the crowd.
So why is Haslam still on the path to creating the exchanges? That raises an interesting question…
After the passage of the PPACA, Haslam’s predecessor, Gov. Phil Bredesen applied for an initial state planning grant to begin looking into the exchanges. He received $1 million for the state of Tennessee in September 2010.
In March 2011, Haslam signed the Tennessee Health Freedom Act into law. It was written to protect Tennessee citizens from government interference in their health care choices. The law prohibits imposition of penalties on Tennesseans for choosing to exercise their right to purchase, or not purchase, health insurance. It also forbids state officials from attempting to implement or enforce any penalties in the future.
On Nov. 29, 2011, Tennesseans got the first indications that Haslam was indeed pursuing the implementation of the Obamacare exchanges when Tom Humphrey reported in the Knoxville News-Sentinel that Haslam had applied for and received a $1.56 million Establishment Grant from HHS.
But that isn’t the end. Haslam has overseen the application for and receipt of two additional grants listed on the Healthcare.gov website.
This means that the state of Tennessee has already accepted more than $9 million in grants toward the implementation of Obamacare from the federal government, $8.1 million of which was applied for and received by none other than Gov. Bill Haslam.
Whether or not these grants “officially” commit the state to the formation of a health care exchange in the federal government’s eyes, it seems clear from these financial dealings that Haslam has intended to create the state health care exchanges all along.
Back to the Tennessee Health Freedom Act, now the law of the land in Tennessee. The Act states:
“It is declared that the public policy of this state, consistent with our constitutionally-recognized and inalienable right of liberty, is that every person within this state has the right to purchase health insurance or to refuse to purchase health insurance, unless purchase of health insurance is otherwise a condition of employment. The government may not interfere with a citizen’s right to purchase health insurance or with a citizen’s right to refuse to purchase health insurance. The government may not enact a law that would restrict these rights or that would impose a form of punishment for exercising either of these rights.
“No public official, employee, or agent of this state or any of its political subdivisions shall act to impose, collect, enforce, or effectuate any penalty in this state that violates the public policy set forth in this section.”
- Tenn. Code Ann. § 56-7-1016 – Tennessee Health Freedom Act (emphasis added)
Haslam has a major problem with the implementation of a “state-run” health care exchange in Tennessee. Because one of the primary purposes of a “state-run” exchange under the PPACA is to determine who merits the tax credits and tax penalties associated with Obamacare, it is illegal for him to implement an exchange in Tennessee according to Michael Cannon of the Cato Institute. To do so would violate the clear protections from penalty set forth in the Health Freedom Act.
The Tennessee Health Freedom Act would have to be repealed before Haslam can legally implement the PPACA exchanges. While Bill Haslam could try to implement the exchanges illegally in spite of the Health Freedom Act, he would open himself up to a cause of action in the courts by any individual or employer who was then subjected to such penalties. (View the video webinar explaining these issues with experts from the Cato Institute, the Goldwater Institute, and the Citizens’ Council for Health Care Freedom here.)
Further, if Tennessee implements the “state-run” exchange and surrounding states don’t, there could be dire economic consequences for Tennessee families as employers leave for other states who did not enact the exchanges.
Haslam’s main talking point is that state insurance companies have told him that they prefer to deal with the state government instead of the federal government. He believes that the state can run an exchange better than the federal government.
This is a misleading premise. The state will not be running the exchange, the Department of Health and Human Services will. Their rules, their guidelines, their flights of fancy will govern the “state-run” exchanges. Even Lt. Gov. Ron Ramsey stated that he expected the state would only have 10-20 percent control of a “state-run” exchange.
Ohio Governor John Kasich cited this fact when he announced his state will not pursue setting up a state exchange.
“At this point, based on the information we have, states do not have any flexibility to build and manage exchanges in ways that respond to unique needs of their citizens or markets. Regardless of who runs the exchange, the end product is the same,” he wrote.
All the state will do is take the blame when the whole house of cards falls down and insurance rates skyrocket.
The Patient Protection and Affordable Care Act does have an Achilles’ heel. It can’t compel anyone to participate. The law itself says:
“No individual, company, business, nonprofit entity, or health insurance issuer offering group or individual health insurance coverage shall be required to participate in any Federal health insurance program created under this Act … or in any Federal health insurance program expanded by this Act … and there shall be no penalty or fine imposed upon any such issuer for choosing not to participate in such programs.” – PPACA 42 U.S.C. § 18115.
The federal government is counting on the state exchanges to be the teeth in its attempt to penalize individual Americans and employers for not doing what it wants. This is why the feds are pushing so hard to get the state governments to implement the state run exchanges.
If enough states stand up and refuse to create the exchanges specified under the Patient Protection and Affordable Care Act, the whole house of cards comes crashing down. The people of Tennessee need to help bring that house of cards down, and make sure that Santa Haslam doesn’t put a lump of coal in the form of an Obamacare exchange in every Tennessean’s stocking this holiday season.
Lesley Swann is a Co-Host for Tenther Radio and the state chapter coordinator for the Tennessee Tenth Amendment Center. She is a native of Anderson County, Tennessee.
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