When governors and state legislators realize that they have been reduced to mere tax collectors for the federal government, bipartisan opposition from the states will be inevitable.

by Dennis Smith at Heritage Foundation

Abstract: The sweeping health care bill pushed by congressional Democrats and President Barack Obama has been signed into law. The enormous expansion of federal power that will result from “Obamacare” will have far-reaching effects on the traditional roles and authority of states—and on the freedoms of American citizens. When governors and state legislators realize that they have been reduced to mere tax collectors for the federal government, bipartisan opposition from the states will be inevitable. Former Director of the Center for Medicaid and State Operations at the U.S. Department of Health and Human Services Dennis Smith explains what states should do to protect their historic authority—and their citizens—from this power grab of one-sixth of the American economy.

Congress and the Obama Administration are confronting the nation’s governors and state legislators with new challenges to states’ traditional authority— and with the difficult decision of whether accepting intrusive and unprecedented federal mandates is in the best interests of their citizens.

With passage of the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act, Congress and the Obama Administration have made extravagant promises to the American people. Many of the most high-profile promises—such as extending the life of the Medicare Trust Fund, allowing those who are happy with their health insurance plans to keep them, lowering the cost of health care, and not raising taxes on families with annual incomes below $250,000—will not be fulfilled.[1]

Based on the provisions of the new law, many of these promises simply cannot be kept. The reality is that the life of the trust fund cannot be extended while the federal government spends the money dedicated to it, Medicare Advantage enrollment will be cut in half, the cost of health care will increase, and the Department of Justice will end up defending the individual mandate on Congress’s power to tax. It is as if official Washington promised the American people the fountain of youth and it was to be paid for with the proverbial pot of gold at the end of the rainbow.

The bad news for states, as well as for the career public servants at the Centers for Medicare and Medicaid Services (CMS), is that they have been charged with spinning straw into gold. Perhaps for some Members of Congress, the failure of states and CMS staff is a viable, perhaps even desirable, option: Failure to lower the cost of health care will become a justification for raising taxes and extending political control. Failure to meet public expectations will embolden those in Congress and elsewhere who have long wanted a government health insurance monopoly, often called a “single-payer” health care system. The law itself, regardless of congressional intentions, is a blueprint for failure.

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