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Guest Column: Health Reform Ruling is Bad for Texas

The Supreme Court's ruling to uphold federal health reform represents a net defeat for Texas families struggling to afford health care in a market fatally distorted by government intervention and fiat.

By Arlene Wohlgemuth
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Thursday was a sad day for constitutional governance and for Texas: despite any silver linings to be found in the Supreme Court’s ruling on Obamacare, the bottom line is that it represents a net defeat for Texas families struggling to afford health care in a market fatally distorted by government intervention and fiat.

The major consequences of the still-extant act are three. First, the individual mandate, now justified by Congress’ power to tax, remains an unprecedented intrusion of the federal government into the lives of all Americans. Second, the ruling does nothing to alleviate the dire fiscal straits of Texas’ Medicaid program. Last but not least, Obamacare is set to wreak havoc on Texas businesses, raising their costs and making them less competitive overall.

Though it has been said many times, the importance of this cannot be overstated: This legislation, and this ruling, now set the precedent for the federal government to be able to force individuals to purchase products if they decree some tangible benefit to it. We must ask ourselves the unfortunate question: where will it end? If we, the American people, can be forced to purchase a commodity – simply by virtue of being an American citizen – it is certainly alarming to think where this newly-created power of Congress may extend in the future. Shifting the rationale for this power from the Constitution’s Commerce Clause to its Tax Clause, as the Roberts Court has done, merely provides Congress with an avenue it will assuredly exploit.

Fortunately, we had a partial win on Thursday when SCOTUS justly ruled that the federal government cannot coerce states into expanding their Medicaid programs, at the risk of losing all Medicaid funding. This is a victory for federalism and is the one silver lining contained in Thursday’s ruling. The Texas Public Policy Foundation (TPPF) wrote an amicus brief on this issue, to which 36 Texas legislators signed on. Elements of our brief can clearly be seen in the SCOTUS dissent, so it is encouraging that – at least on this point – SCOTUS agrees with our own Legislature.

Unfortunately, with the affirmation of the individual mandate, Texas Medicaid problems are further exacerbated. Every state has citizens who are eligible for Medicaid but who have chosen not to enroll. As of 2006, Texas had almost one million people who fell in that category. Now, as a result of the individual mandate, these individuals will be forced to enroll in Medicaid. This will lead to an influx into our state Medicaid program, which is a serious issue for two reasons. First, Medicaid is economically unsustainable – in fact, TPPF now estimates than an additional $10 billion in new general revenue for the 2014-15 biennium will be required to fund it. Second, not only is Medicaid an economically unsustainable program, but it is also unjust. A study from the University of Virginia found that in many cases, Medicaid recipients actually exhibited worse health care outcomes than their uninsured counterparts. This certainly begs the question as to whether it is humane to force people into such a program.

No less pressing is the detrimental impact Obamacare will have on Texas businesses. The National Federation of Independent Business (NFIB) predicts 6,000 fewer jobs in Texas by 2021, 3,300 of which will be from small businesses. Additionally, NFIB predicts $3.1 billion in lost sales for Texas businesses due to Obamacare. Another notable cost for Texas businesses are penalties to be paid due to this legislation, estimated at $9.3 billion through 2019. And of course, it will come as no surprise that penalties such as these will be passed on to consumers in the form of higher prices. All of these costs will be paid by Texas businesses to benefit the health of a few. Will Newton (NFIB's Texas executive director) has stated, “The new law does little to encourage business owners who do not provide health care coverage to their employees — it is more likely that an employer who provides coverage will drop benefits altogether or decrease their contribution.”

This now becomes an issue for elected representatives to resolve. Since its passage, Obamacare has not seen the majority support of Americans once – not even for a single day. It is encouraging that the U.S. House has already scheduled a vote for repeal on July 11, but we must look for even more aggressive action when it comes to repealing and replacing this unfortunate piece of legislation. Not only must we demand the repeal of this unjust law, but we must also replace it with true, just, health care reform. Conservatives are prepared to replace Obamacare, but it must be the will of the people to first repeal it. Following repeal, true health care reform must include a block grant of the Medicaid program to the states. With the consequences for Texas so dire, we in the Lone Star State must take advantage of the opportunity to lead the way.

Arlene Wohlgemuth is the executive director of the Texas Public Policy Foundation, a conservative thinktank. 

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