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Thread: Can the states by themselves now unravel ObamaCare?

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    Can the states by themselves now unravel ObamaCare?

    If the recalcitrant states stick by their guns, Obamacare will easily become a thing of the past by 2014. And here is how.

    "If states decide to neither expand Medicaid nor set up health care exchanges, these acts would effectively block most if not all of ObamaCare's new entitlement spending."


    Several authorities have pointed out that the Medicaid expansion under ObamaCare would cost New York state, for example, up to $52 billion over ten years. If New York and other states balk at the cost most of those who would've been eligible for Medicaid will now become eligible for subsidies through ObamaCare's health-insurance exchanges. And for several years those subsidies are paid in full by the feds.

    Of course, these authorities conclude if states do shift those costs back to the feds, that will cause the federal cost of ObamaCare to skyrocket. If every state were to refuse to expand its Medicaid program, the feds would save roughly $130 billion in their share of Medicaid costs in 2014, but would have to pay $230 billion more in new exchange-based subsidies - for a net added cost of $100 billion. And that's just for the first year.

    Article follows.

    Only 13 states to date have set up state exchanges, with Tanner estimating that "as few as" 15 states will have done so by the 2014 deadline. The feds are empowered by the law to come in and set up exchanges in the recalcitrant states. But even if they manage to do so, which is an uncertain premise, they may have a small problem on their hands, according to Tanner federal subsidies are available only through exchanges that the states set up. The feds can't offer subsidies through a federally run exchange.

    Thus, if states neither expanded Medicaid nor set up exchanges, that would effectively block most of ObamaCare's new entitlement spending. On top of that, the employer mandate penalty, for employers with more than 50 employees who do not provide "adequate" health insurance, kicks in only when at least one employee "qualifies for subsidies under the exchange:"

    Since subsidies can only be provided via a state-authorized exchange, a state that refuses to set one up could end up blocking the employer mandate altogether. Whether this whole string of reasoning holds together in reality remains to be seen, but at the very least, unless we are spared by a timely repeal, we can look forward to a long line of lawsuits and legal wrangling that will hopefully take years to resolve.

    Source: Blog: Can the states unravel ObamaCare?
    Last edited by James Cessna; 07-04-12 at 12:02 PM.

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    Re: Can the states by themselves now unravel ObamaCare?

    States can opt out of the Medicare expansion, though they would be idiotic to do so (because it costs them nothing for three years and only 10% after that). But they cannot avoid exchanges. If they fail to set up their own then state residents will be able to take advantage of a federal exchange.
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

    -- Adam Smith

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    Re: Can the states by themselves now unravel ObamaCare?

    Quote Originally Posted by AdamT View Post

    States can opt out of the Medicare expansion, though they would be idiotic to do so (because it costs them nothing for three years and only 10% after that). But they cannot avoid exchanges. If they fail to set up their own then state residents will be able to take advantage of a federal exchange.
    You are mistaken, AdamT.

    The costs of Obamacare will skyrocket by at least a trillion dollars as soon as the Medicaid expansion is implemented in 2014.

    Here is a crucial statistic from CNN.

    The world of the U.S. health care issue – Global Public Square - CNN.com Blogs

    New Jersey’s Camden Coalition of Healthcare Providers founder and family medicine practitioner, Jeffrey Brenner, used medical billing records to find that just 1% of patients accounted for 30% of health care costs in Camden. And that's not all he discovered in the city's three hospitals. He says: "We learned that someone went 113 times in one year. Someone went 324 times in five years. In similar workup in Trenton, they found someone who went 450 times in one year." These were people with complicated medical histories and chronic illnesses. One patient alone racked up $3.5 million in medical bills over a five year period. As Brenner says, :"They're the difficult patients to treat, and no one is being paid and incentivized to pay attention to them."

    What's more, Camden's problem is America's problem. Just 5% of Americans accounted for half of our nation's health care costs in 2009. This is perhaps the crucial statistic to understand about America's health care problem.

    Obamacare does absolutely nothing to resolve this problem. In fact, it makes the problem worse by adding millions of indigent people to the Medicaid rolls who will abuse and overuse the heath care system like many of them do now.

    Abuse and overuse of the health care system will produce much higher costs ($ trillions) to the U.S. taxpayers.
    Last edited by James Cessna; 07-04-12 at 12:30 PM.

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    Re: Can the states by themselves now unravel ObamaCare?

    No, I'm not wrong. For the first three years the federal government will finance 100% of the Medicade expansion. After that states will only pay 10% of the cost. So if a state opts out, it will be turning down tens of billions of dollars in federal aid that would go to providing health care to the working poor -- thus taking pressure off hospitals and clinics that now have to eat those costs.
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

    -- Adam Smith

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    Re: Can the states by themselves now unravel ObamaCare?

    Quote Originally Posted by AdamT View Post

    No, I'm not wrong. For the first three years the federal government will finance 100% of the Medicade expansion. After that states will only pay 10% of the cost. So if a state opts out, it will be turning down tens of billions of dollars in federal aid that would go to providing health care to the working poor -- thus taking pressure off hospitals and clinics that now have to eat those costs.
    No, you are mistaken and here is why.

    The money the feds "gives" to the states to expand their Medicaid program in 2014 comes from the federal taxes that are paid by the state residents.

    Consequently, the state residents end up paying for the full cost of the expanded Medicaid program! The federal government just collects and gives some of their money back to them to run the expanded state program!

    Of course, these authorities conclude if states do shift those costs back to the feds, that will cause the federal cost of ObamaCare to skyrocket. If every state were to refuse to expand its Medicaid program, the feds would save roughly $130 billion in their share of Medicaid costs in 2014, but would have to pay $230 billion more in new exchange-based subsidies - for a net added cost of $100 billion. And that's just for the first year.

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    Re: Can the states by themselves now unravel ObamaCare?

    Do you think the states will get a rebate check if they opt out of the expansion? They will not. They will simply lose the benefits they are entitled to. And I'm thinking they will also lose a lot of elections if they allow this partisan stupidity to trump what's best for their people.

    And of course the exchange subsidies are paid for by the federal government whether the state sets up the exchange or the feds set up the exchange.
    Last edited by AdamT; 07-04-12 at 12:45 PM.
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

    -- Adam Smith

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    Re: Can the states by themselves now unravel ObamaCare?

    Quote Originally Posted by AdamT View Post

    Do you think the states will get a rebate check if they opt out of the expansion? They will not. They will simply lose the benefits they are entitled to. And I'm thinking they will also lose a lot of elections if they allow this partisan stupidity to trump what's best for their people.

    And of course the exchange subsidies are paid for by the federal government whether the state sets up the exchange or the feds set up the exchange.
    The answer to your question is very simple.

    The residents of the states save money if they opt out of the Medicaid expansion.



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    Re: Can the states by themselves now unravel ObamaCare?

    Quote Originally Posted by James Cessna View Post
    The answer to your question is very simple.

    The residents of the states save money if they opt out of the Medicaid expansion.
    The residents of a state that opts out will lose tens of billions of dollars and there is absolutely no way around that.
    "The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. ... It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."

    -- Adam Smith

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    Re: Can the states by themselves now unravel ObamaCare?

    Quote Originally Posted by AdamT View Post
    No, I'm not wrong.
    You have just been fined $5,000 for violation of the double negative statute. Be well.
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    “Mr. Speaker, I once again find myself compelled to vote against the annual budget resolution for a very simple reason: it makes government bigger.” ― Ron Paul
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    Re: Can the states by themselves now unravel ObamaCare?

    Quote Originally Posted by AdamT View Post
    The residents of a state that opts out will lose tens of billions of dollars and there is absolutely no way around that.
    IMO, that states that opt out of are going to be the ones whose citizens overwhelmingly disagree with the ACA anyway. States like Texas, Alabama, Louisiana, South Carolina, etc. You know as well as I do that politicians, of whatever lean, are going to calculate their ability to be re-elected into any decision they make. The Congress's and Governors of these states know full well that fighting the ACA is exactly what their citizens want them to do. I don't believe there will be an issue with re-elections. The real issue will be an even bigger wedge driven between the population. We already have a pretty big wedge driven between everyone south of the Mason-Dixon, west to Oklahoma and Texas, and Alaska and the rest of the country. Its just going to get worse with this. Thats just the way it is. Some people like more gov't involvement, some don't. Thats the way our country is supposed to be. States governments reflect their citizens. That is what is happening now. What doesn't need to happen is that carrying over into our Federal politics and essentially shutting everything down. We'll see in November though.
    “Mr. Speaker, I once again find myself compelled to vote against the annual budget resolution for a very simple reason: it makes government bigger.” ― Ron Paul
    Timid men prefer the calm of despotism to the tempestuous sea of Liberty. – Thomas Jefferson

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