Pennsylvania faces a number of critical issues that Gov. Tom Corbett and the newly elected General Assembly will soon be required to confront. Perhaps the most consequential to job creators and taxpayers is implementation of several mandates contained within the federal Patient Protection and Affordable Care Act, also known as ObamaCare.
The U.S. Supreme Court on June 28 ruled that the federal government may not withhold Medicaid funds from the states if they do not create health insurance exchanges as required by ObamaCare. This means states may now decide whether or not they want to participate in this federal scheme without losing money that helped pay the medical bills for the most vulnerable. Another major issue our state must confront is the decision of whether or not to implement the law’s massive expansion of Medicaid. We believe Pennsylvania should stand with our job creators, patients and taxpayers, and reject both.
By forcing the states to create health care exchanges controlled by Washington, ObamaCare would put federal bureaucrats in charge of nearly all medical care in the nation under the guise of extending healthcare coverage to up to 30 million uninsured Americans. It has been estimated that these exchanges will cost states anywhere from $10 million to $100 million per year to establish and run.
States are to establish these insurance exchanges as a place people can shop for approved plans and apply for tax subsidies toward the cost of health-insurance premiums. Unfortunately, the Obama administration has yet to provide the critical information states need prior to setting up such an exchange. If a state chooses not to set up their own exchange, the law provides for federal “fallback” exchanges. However, Congress has yet to provide funding necessary to implement these fallback exchanges.
Rejecting the state-run exchange and defaulting to a federal exchange will exempt a state’s employers from the employer mandate. This mandate is a tax of $2,000 per worker, per year on any company with more than 59 employees. This is hardly the time to hit our small businesses with a job-crushing tax. Already, many businesses are hesitant to hire more employees for fear that crossing the 59-employee threshold would result in costs that would force them to shut their doors.
The bottom line is that setting up insurance exchanges will result in higher taxes on Pennsylvania families and fewer jobs while too many are still seeking work.
The deadline for states to decide whether or not to implement state exchanges was Nov. 16, 2012. The Obama Administration has extended the deadline until Dec. 14, 2012. We believe Pennsylvania should answer the federal government with a firm “NO.”
In addition, Pennsylvania should decline to implement the “not-so-Affordable Care Act’s” Medicaid expansion. Expansion of Medicaid will cost our taxpayers an additional $1.3 billion to $5.5 billion in the first eight years, which means higher taxes or significant reductions in other important areas of state spending. The reality is Medicaid delivers reimbursement rates below the actual cost to provide care. Health facilities make up for this shortfall by increasing the charges for everyone else who self pays or has insurance. This means patients will pay for this proposed expansion in two ways: first through increased taxes and second through increased healthcare bills and insurance premiums.
Medicaid has been growing twice as fast as personal income over the past decade. This spending is unsustainable without the expansion required by the Affordable Care Act. But it is also unsustainable in the long run, because even if a state fully embraces ObamaCare, the federal contribution declines over time, leaving state taxpayers to both foot more of the bill of what will result in longer waits to see the doctor and reduced levels of care.
Again, Pennsylvania should send a strong message to Washington, D.C., and reject the state exchanges and the expansion of Medicaid.
There are positive steps we can and should take to pursue policies that actually reduce health care costs, give patients greater control over health care dollars, provide patients and employers with more health care options and improve the overall quality of care. Before we can fully focus our policy efforts on this free market approach, we must reject this attempt to set up a state health insurance exchange and expand Medicaid. Both efforts would result in higher taxes and increased health care costs, neither of which our economy can afford.
Reps. Ryan Aument and Bryan Cutler are both members of the Pennsylvania House of Representatives Health Committee.