The Rise of the Anti-ObamaCare Compacts

Reporting on Politics and Policy.
March 29 2011 12:22 PM

The Rise of the Anti-ObamaCare Compacts

Back in December, I attended part of the American Legislative Exchange Council's annual meeting and heard about a bold, new-ish idea that could let states slip out of the Affordable Care Act's mandates.

Several states -- Arizona, Virginia, etc -- have already passed Health Care Freedom laws that prohibit the states from complying in the health care mandate. According to Nick Dranias of the Goldwater Institute, that opens the door for states to form compacts that would supersede federal regulation.

"Take that existing framework," Dranias suggested to a room of state legislators this morning. "Make any violation by anyone of those rights a criminal offense, pair up with a state that thinks like you on the same topics, make sure they criminalize any violation of those rights, and reach a compact. Lodge it with Congress. And then bring on the fight when the IRS comes in and tries to penalize people for not following the individual mandate."

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What happens when you tell a bunch of Republican legislators about an idea like that? They adopt it. Stephanie Mencimer reports that a dozen states have been debating compacts and that there's a national organizing force behind it, the Health Care Compact Alliance . (A whois search informs us that the domain for the organization was registered a week after the 2010 elections.)

The legality and strategic value of the compacts is still up in the air; that hasn't changed since the idea came up. The accounting, as Mencimer reports, is not as fun as the bayonet charge against Obamacare.

In Texas alone, where the House Committee on State Sovereignty held a hearing on a proposed compact bill in mid-March, the state could theoretically gain control of $60.4 billion dollars annually to run Medicare, community health centers, and an assortment of other programs that are presently federally administered. But the notion of the Texas legislature running Medicare, much less the other programs, may not end up being all that appealing to state residents, even tea partiers, once they realize how the compact works in practical terms.

Should the state assume control over the federal money, it would lose access to the automatic increases that come in times of crisis, like the stimulus funding that helped prop up state Medicaid funds during the recession. State control would also provide no mechanism or extra funding to cover the uninsured, who number more than 6 million in Texas alone. More significantly, though, the federal funding levels would be essentially fixed in 2010 dollars, with a minor provision for small inflation- and population-related increases.

Well: I just said the accounting wasn't fun, but this isn't really distant from what Tea Party intellectual leaders think we need to do about entitlements. It is at odds with the membership of the movement, because a lot of the opposition to "ObamaCare" came out of fear that it would shred Medicare and Medicaid.

David Weigel is a reporter for Bloomberg Politics

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