John Hood: Saying no is a good start

Feb. 18, 2013 @ 04:58 PM

RALEIGH — Now that the North Carolina Senate has sent a clear signal that it opposes both Medicaid expansion and a state-based health exchange, the state capital is abuzz with complaints and speculations.
Are Senate leader Phil Berger, House Speaker Thom Tillis, and Gov. Pat McCrory jockeying for political position? Are they trying to use state action to nullify a federal law? Are they just making an ideological statement instead of making public policy?
No, no, and no. North Carolina Republicans have long opposed Obamacare. After Chief Justice John Roberts waffled on the constitutional question and President Barack Obama won re-election, GOP leaders recognized that immediate repeal of the legislation was impossible. But that doesn’t mean they’ve accepted it as a permanent fixture of American life.
They also know that, due to Obamacare, parts of the private insurance market are about to blow up. Estimates vary, but it is likely that in a few months North Carolina health insurers will release eye-popping rate increases for 2014. In the small group and individual market, the proposal will be to hike rates 100 percent or more for some customers, and maybe half that for many customers.
For some, this will come as a shock. They truly believed the original promise that the law would cut health care costs and insurance premiums. But other Obamacare advocates won’t be shocked at all. They never believed in the efficacy or desirability of private health care arrangements, anyway, and see blowing up the insurance market as the necessary precondition for the subsequent adoption of Medicare/Medicaid for all.
At the state level, then, conservative governors and lawmakers have had to do their homework. They have had to learn that one reason the Obama administration desperately wants states to create insurance exchanges is that it will give voters multiple officials and levels of government to blame for an unpopular policy likely to become even more unpopular. In other words, Washington is playing politics with the states, not the other way around.
State officials have also had to learn that the Obama administration isn’t prepared to set up dozens of new federal exchanges this fall, anyway. Implementation delays are likely. Furthermore, they have learned that by the plain text of the Affordable Care Act, much of its architecture is predicated on the existence of state-run exchanges. By defaulting to a federally run exchange, they may well shield their state’s households and businesses from mandates and taxes, if current litigation by Oklahoma and other states is successful in the federal courts.
None of this constitutes nullification. It constitutes North Carolina officials exercising their due diligence to put pressure on Congress to take remedial action. Repeal is impossible while Obama is president. But Congress may find it necessary to revisit key provisions of what will soon be revealed as an unworkable law.
Is that goal worth hearing a few complaints from special-interest lobbies and some fanciful speculations by Raleigh politicos? You bet.

John Hood is president of the John Locke Foundation and author of “Our Best Foot Forward,” a book on North Carolina’s economy. It is available at Representations of fact and opinions are solely those of the author.