Arkansas Republicans still fighting Obamacare 

Why federal-government-hating state Republicans, with direction from national conservatives, oppose the state-run exchange.

click to enlarge Michael Cannon image
  • Michael Cannon

As the national conservative movement takes a total-resistance stance on all things Obamacare, their arguments have filtered down to Arkansas on the health-insurance exchange question and are likely to continue to crop up with the coming debate over Medicaid expansion. And some Affordable Care Act opponents believe a lawsuit (yes, another one) may yet undercut the law in places like Arkansas.

The ACA created health-insurance exchanges — regulated marketplaces for some consumers to buy private health insurance — that must be up and running in each state by 2014. Though Gov. Mike Beebe had expressed a preference for a state-run health-insurance exchange, Arkansas opted for a partnership with the federal government earlier this month after the idea of a state-run exchange was scuttled because of objection from legislators, with strong opposition coming from the Republican side.

It may seem strange that conservatives, usually strongly in favor of more state control, have led the charge against state-run exchanges, seemingly ceding more authority to the federal government. (Sen. Jason Rapert [R-Conway] tweeted, "I am hearing from tons of business owners begging the Legislature to say NO to a state or hybrid health exchange for our state" on the very same day that he tweeted, "Federalism is in crisis in our country. The states have nearly ceded all authority they have under the 10th amendment.")

Republican lawmakers say that they believe that ultimately the feds will have control either way and that a state-run exchange will end up costing the state money, despite more than $26 million in grants from the feds to set up the exchange and a plan to use existing premium fees to meet the ACA's requirement that the exchange be self-sustaining.

In addition to these objections, opposition to state-run exchanges is part of the platform of continued resistance to the ACA that animates the Republican base. Locally, legislators are paying attention. Rep. Nate Bell (R-Mena) has tweeted advice from Christie Herrera, director of the health and human services task force for the American Legislative Exchange Council (funded by right-wing billionaires David and Charles Koch), on "steps states can take to prevent Obamacare's most destructive effects on the health care system." Number one on Herrera's list was "reject state health insurance exchanges."

Indeed, ALEC — which published the "State Legislators Guide to Repealing Obamacare" last year and counts a number of Arkansas legislators as members — aggressively lobbied states across the country to say no to creating their own state exchange, as have other conservative outfits such as the Pacific Research Outfit, FreedomWorks and Americans for Prosperity (also Koch-funded).

It's not surprising that anti-ACA activists might have an interest in throwing a wrench into the plans of the Obama administration, which initially thought states would run the exchanges and is now in a scramble to set up federally run exchanges. Many also genuinely believe that the exchanges will be a disaster, and they want to pin blame on the feds (and Obama) rather than the states.

Still, given that exchanges are going to happen either way, why has so much effort has been put into the technical question of who's in charge? It turns out that ACA opponents believe there's more at stake than ruffling administration feathers as a final stand in their great lost cause. They hope that states that reject exchanges may be able to combat the law in court.

Michael Cannon, health-care point man for libertarian think tank the Cato Institute, has argued that while the ACA authorizes state-run exchanges to give tax credits and subsidies to consumers making between 100 and 400 percent of the federal poverty level, it does not authorize federally run exchanges to do so. The IRS has interpreted the statute differently and plans to authorize tax credits and subsidies regardless of whether states or the feds run the exchange.


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