Why Raleigh Told Washington No

Why Raleigh Told Washington No  An Excellent Clarification!

John Hood Daily Journal
February 15, 2013

RALEIGH — Now that the General Assembly has made it clear North Carolina will not set up state insurance exchanges or expand Medicaid under the terms of the Affordable Care Act, I’m going to remind Carolina Journal readers what they know about the complicated issues involved that readers and viewers of other media outlets likely don’t know because of the embarrassingly poor news coverage the latter group has been provided.


To start with, the reason Gov. Pat McCrory and North Carolina lawmakers were faced with two difficult decisions about Obamacare is that it was a poorly conceived, sloppily written piece of legislation. Cobbled together from ill-fitting pieces in an attempt to please both the Center and Left of the Democratic Party, and to bribe certain members of Congress to vote for a measure their constituents did not favor, the bill contains contradictions, ambiguities, legal problems, and a huge transfer of policymaking authority from elected representatives (be they in Congress or state legislatures) to federal regulators.

Regarding health exchanges, there is a key legal distinction between a state-run exchange and a federal exchange. According to the text of the Affordable Care Act, federal tax credits for the purchase of insurance plans are only available if individuals purchase those plans through state-run exchanges. The idea was to give states an incentive to set up their own exchanges, rather than default to a federal exchange.

Furthermore, all of the employer mandates to provide health insurance, and some of the individual mandates to purchase health insurance, are predicated on eligibility for those federal tax credits. As the U.S. Supreme Court later affirmed, Congress actually lacked the constitutional authority to compel Americans to purchase private health insurance. The reason Obamacare was upheld anyway is that Justice John Roberts deemed the taxes levied for noncompliance to be too low to constitute a real mandate. They are simply taxes – and in many cases they apply only when employees are eligible for federal tax credits.

If tax credits are disallowed under federal exchanges, such taxes are no longer applicable. Oklahoma and other states are currently suing the federal government to enforce these terms of the Affordable Care Act. The Obama administration has responded that regardless of what the law actually says, the intent was for everyone to be eligible for the credits and subject to the taxes.

CONTINUED:  http://www.carolinajournal.com/daily_journal/display.html?id=9908