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Wednesday, July 4, 2012

At Least 15 States May Not Expand Medicaid Coverage

One thing Justice Roberts cannot do for Obama is make Obamacare popular and the recent court ruling is certain to put Obamacare front and center in not only the presidential election but all down the ballot. By allowing states to opt out of the Medicaid expansion, the court ruling has given governors and state legislators a contentious issue that they must decide and soon. Governors Nikki Haley, Bobby Jindal, Rick Scott, and Scott Walker have already announced that they will pass on the federal largess in exchange fiscal stability in the future. A Hill post by Elise Viebeck lists seven states all but certain to pass on the expansion; Florida, Iowa, Kansas, Louisiana, Nebraska, South Carolina, and Wisconsin. Viebeck list another 8 states as probable non takers; Alabama, Georgia, Indiana, Mississippi, Missouri, Nevada, Texas, and Virginia. She only list 12 states as certain to expand Medicaid with the remainder of states undecided. Inasmuch as Obamacare went down in flames in Missouri and Ohio one doubts there is much popular sentiment for embracing any part of Obamacare in these two swing states. In Indiana the fall election is only the last formality Mike Pence must deal with before being sworn in as governor so it's doubtful there will be much debate here about helping the fed out of its mess. Governor Chris Christie will expand Medicaid which will not help his popularity on a national level and will further erode his bona fides as a conservative. Texas Governor Rick Perry “has no interest in fast-tracking any portion of this bankrupting and overreaching legislation,” spokeswoman Lucy Nashed said Monday. “We will continue to call for the full repeal of the bill.”

We have seen in the past few years that nothing drives voter turnout like Obamacare but it gets better still. The states must also establish health insurance exchanges or the federal government will do it for them. Here the choice can get tricky because of the way the law reads. A fine is levied on an employer (who has 50 or more employees) when one of its employees receives a subsidy on a policy purchased on a state insurance exchange. But if there is no state insurance exchange? No fine. States have it within their power to nullify the employer mandate by simply not establishing an exchange, at least until a future administration can convince a court to ignore the letter of the Obamacare law. If a right to work state has a comparative advantage over union states imagine the advantage a state with no health insurance employer mandate would have over a state with an employer mandate. An employer could could pay higher wages and promise to fly any employee in dire need of health care to any complying state where he would be allowed to purchase health insurance on his way to the hospital. Large companies could keep a team of doctors on their payrolls to attend to their employees' normal medical needs at a fraction of the cost of complying with the employer mandate.

In chess there are a number of defenses where the opponent is induced to capture a pawn, a so called "poisoned pawn". After the opponent captures the pawn, usually a the knight's pawn on the queen side, he finds the cost of the pawn is a pronounced positional disadvantage. One might imagine that the latest court win for Obama was a poisoned pawn.

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