States Get Crafty In Effort To Ease Cost Of Obamacare
April 25, 2013 by Ben Bullard
Lawmakers in Washington State have devised a way to bail State government out of massive new costs related to funding Obamacare mandates, by rearranging part-time public worker classifications so that more employees become eligible for coverage under a Federal exchange program — where they’ll be covered by Federal, instead of State, dollars.
In order to do that, a lot of part-time workers will have to give up their present coverage, choosing instead from among private plans set up under an exchange program run by the State. How will that save the State money? Because health exchanges, a key feature of President Barack Obama’s Patient Protection and Affordable Care Act, are eligible for Federal subsidy.
For States like Washington that have signed on to Obamacare, it’s a futile attempt at exerting some measure of sovereignty in implementing an unfunded — or grossly underfunded — Federal mandate.
The more States realize how big a chunk Obamacare will take from their annual budgets, the more they’ll seek ways to displace that burden by “qualifying” more covered individuals for insurance coverage that the Federal government, under the new law, must pay for.
But doing so debases insurance coverage and drives up premiums, as more people who previously went without coverage join the ranks of the insured. And in order for Obamacare States to keep up with the jump in enrollees and the accompanying jump in State costs, they will have to agree to more subsidizing by the Feds — subsidizing that comes across only if the States agree to all the terms.
It’s a vicious cycle. The Federal government can continue to justify an expansion of sovereign powers over the States as long as it regulates them into an untenable position of either accepting Federal subsidies, per the terms of the Act, or opting out altogether and watching their annual public revenues disappear under the crushing weight of Medicaid.
Washington State’s proposal isn’t the only example of a State government innovating ways to put the costs of Obamacare back on Washington, D.C. Because the Obamacare plan stipulates that anyone who works more than 30 hours a week is a “full time” employee for coverage purposes, States like Virginia already have slashed wage-grade public employees’ hours in order to put them in the group eligible for Federal subsidy.