If ever there were an issue to which the adage, “When life gives you lemons, make lemonade,” applies, Obamacare is certainly it.
States will be required to decide by the end of the week whether they are going to set up state exchanges or leave the task to the federal government. Several states have already declared their intention not to create exchanges, but always in the context of avoiding a hardship or expense.
There is another major advantage, however, to refusing to establish a state exchange, stemming from a particular flaw (one among many) in the Affordable Care Act’s language that establishes penalties for failure to comply with the Act’s provisions, but only if a state creates an exchange.
As one Wisconsin Republican Party official explains (emphases mine):
By refusing to take part in the state health exchange Wisconsin can attract companies from other states because it will be less expensive to do business here.
States have the option of joining a state or federal health exchange. If the state health exchange is refused, it defaults to the federal health exchange and the feds have to pay for it and cannot penalize or charge the state anything.
If over 30 states refuse this state health exchange, it will force Congress to reopen Obamacare.
Let us pray that 30 states reject the exchanges. Whether they do or not, however, those states that reject exchanges can help themselves by actively touting (through advertising and public relations) the advantages of moving businesses from a state exchange state to a federal exchange state. Depending on how many businesses accept such offers, some, if not all, of the state-exchange states will become very angry – to the point, one hopes, that they will deluge Washington with demands to repeal Obamacare.
Allow me also to hazard a guess that at least some of the states refusing to create exchanges are also right-to-work states, creating an even greater incentive for businesses to relocate there.
We can be sure that at least some of the states that do create exchanges will be blue states that voted for Obama – and by extension, for Obamacare. By this writer’s reckoning, they will be getting exactly what they deserve.
The first priority, of course, is to repeal Obamacare. But if the states that opposed Obamacare can simultaneously reward themselves and punish those states that supported the ACA, well, that is very sweet icing on the cake.
It behooves states that reject the exchanges to also persuade states that are still on the fence, emphasizing not just the bureaucracy and expense their states would avoid, but also the jobs and tax revenues they would gain by refusing to create exchanges and actively soliciting businesses to leave the state-exchange states.
Finally, to the extent this migration constitutes a move from blue states to red states, it's worth noting that the distribution of electoral votes among the states may move with it.