The federal government has told the states that they have until the end of the day today to decide whether they will move forward with two costly provisions of Obamacare: Medicaid expansion and the so-called “state run” exchanges. Governors from South Carolina, Wisconsin, Texas, and others have announced that they will not set up exchanges in their states. ATR is encouraging other governors to join them in declining to set up Obamacare exchanges, as such a move will protect taxpayers and employers in their states.

By setting up exchanges themselves, as opposed to letting the Feds do it, governors would expose employers in their states to massive job-killing tax increases. Obamacare imposes a tax on employers of $2,000 per-worker, but, given the way in which Obamacare was hastily crafted, it can only be imposed if a state is setting up the exchange.  Furthermore, setting up the exchanges on the state level will cost cash-strapped state governments a significant amount of scarce state resources,  between $10-100 million per year, which cause many states to raise taxes to cover additional costs. And lastly, the idea of a “state run” exchange is nothing more than a myth. In reality, the exchanges are still subject to the approval of federal bureaucrats, who must ensure that it is in compliance with the regulations mandated under Obamacare. As Wisconsin Governor Scott Walker said in a letter to the Secretary of Health and Human Services: “If the state option is chosen; however, Wisconsinites face risk from a federal mandate lacking long-term guaranteed funding. […]Unfortunately, operating a state exchange would not provide the flexibility to meet our state’s unique needs or to protect our state’s taxpayers.”

Similarly, ATR urges states to reject the costly Obamacare Medicaid expansion, which is now optional for states as a result of the July Supreme Court ruling on Obamacare. Medicaid costs in the states have skyrocketed from $70 billion in 1990 to $400 billion today. With this entitlement program already on a trajectory to bankrupt the states, it simply makes no sense for states to increase their Medicaid rolls, without any effort to reduce the costs. Doing so is fiscally irresponsible and reckless, and puts the long-term financial wellbeing of states at risk.  Many of the same governors who are declining to set up Obamacare exchanges have courageously come out in opposition to this costly and unworkable expansion. For the sake of their states’ fiscal health, ATR urges all other governors to do the same. 

To read the statement that Governor Walker made concerning Wisconsin's decision to not set up an exchange, click here.