Could Utah use glitch to evade Obamacare?


In February 2011, John Graham of the Pacific Research Institute predicted that “Obamacare will destroy Utah’s health exchange.” A recent article in The Wall Street Journal identifies an “Obamacare glitch” that could prove Graham’s prophecy to be true, but in a way he may not have expected.

[pullquote]Would Utah be willing to give up its health exchange for a chance to thwart Obama’s health care agenda?[/pullquote]The authors of the article, Jonathan H. Adler and Michael F. Cannon, explain that “The Patient Protection and Affordable Care Act offers ‘premium assistance’ – tax credits and subsidies – to households purchasing coverage through new health-insurance exchanges.” The law was intended to offer this assistance either through state health-insurance exchanges or, if states do not opt to create their own exchange, through federal exchanges established and operated within each state.

As Adler and Cannon point out, “This is where the glitch comes in: Obamacare authorizes premium assistance in state-run exchanges (Section 1311) but not federal ones (Section 1321). In other words, states that refuse to create an exchange can block much of Obamacare’s spending and practically force Congress to reopen the law for revisions.”

While thus far only 17 states have decided to create their own exchange, Utah has created an exchange that is already up and running. Thus, if Adler and Cannon are correct, then one possible way for Utah to minimize the influence of Obamacare in the state is to eliminate its health insurance exchange, unless it can find another way to keep it running while preventing federal funding from flowing through it.

This glitch creates a conundrum for Utah: Most Utahns seem to spurn Obamacare and prefer that the state manage its own health-care systems, but many Utah government leaders also praise the state’s health exchange as one way to improve health care in Utah. Would Utah be willing to give up its health exchange for a chance to thwart Obama’s health care agenda?

The Obama administration is devising every scheme it can to fix this glitch, but, in the end,Utah may have an important decision to make: keep its exchange and let Obamacare wreak havoc, or abandon the former to shield Utah from the latter.