Obamacare's Achilles' Heel

"Insurance exchanges constitute the key to success or failure of the law," writes David Catron, adding "states have an opportunity to shoot a poison arrow directly into Obamacare's Achilles' heel."

• Obamacare can't work with insurance exchanges — i.e., new bureaucracies whose ostensible purpose will be to provide "marketplaces" in which people with no employer-based health insurance can shop for coverage at competitive rates.
• The law assumes states will create insurance exchanges, but it doesn't actually require them to do so.
• States have no rational incentive to create exchanges, since exchanges will cost states from $10 million to $100 million per year to operate.
• The Feds can set up an insurance exchange, but then it would bear the operational costs, which it can't afford. Worse, state-based exchanges may distribute credits and subsidies, but a federal exchange may not. That's a huge problem for Obamacare zealots.

There's one more twist in the law. Not creating an insurance exchange protects a state's businesses from job-killing penalties:

Seventy-three [US] senators and representatives have signed a letter to the National Governors Association urging its members to stay in the fight against Obamacare. ... The letter goes on to specifically implore the governors "to oppose any creation of a state health care exchange mandated under the President's discredited health care law."

The letter, whose signatories include Senators DeMint, Lee, Coburn, Graham, Vitter, Paul, Cornyn, Sessions, Rubio, Toomey and Shelby, points out a number of facts that are apparently not well understood by state politicians, including the effect the exchanges will have on their business constituents.  "Resisting the implementation of exchanges is good for hiring and investment. The law's employer mandate assesses penalties -- up to $3,000 per employee -- only to businesses who don't satisfy federally-approved health insurance standards and whose employees receive 'premium assistance' through the exchanges."

In other words, a state that declines to set up an exchange will protect the businesses of that state from avoidable and job-killing penalties. This reality has apparently begun to sink in. There has been a noticeable decline in enthusiasm for exchanges among states that had begun work on them shortly after Obamacare passed. North Dakota, New Hampshire, Idaho and South Carolina, to name a few, have abandoned plans to create these insurance "marketplaces." Kaiser Health News reports that, by the end of June, "only 14 states and the District of Columbia have so far passed legislation authorizing the exchanges."

Florida, Wisconsin, Kansas, Oklahoma, Alabama, New Jersey and Louisiana are also refusing to create insurance exchanges.

So, even after the Supreme Court's incoherent ruling that Obamacare and its much-reviled mandate are constitutional, there is still hope that the monster can be brought low. If the states simply decline to implement the insurance exchanges, the beast will die.