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Fraudulent claims about the Arizona ObamaCare Exchange

May 09, 2012

Fraudulent Claims

What the insurance lobbyists are not telling you about
the Arizona ObamaCare Insurance Exchange

Click here for a printable pdf version of this document that includes a copy of the Arizona Health Care Freedom Pledge.

Claim: Arizonans will have more “control” over their health care market if they set up a state exchange than if they allow a federal exchange to be set up.

Reality: How is that Medicaid thing working out for you? There is almost no state control in the federal-state Medicaid “partnership,” and ObamaCare will be worse. Under ObamaCare, the Arizona exchange will have the federal HHS mandates PLUS anything that local lobbyists, including disease-group lobbyists and advocates, will push on the Arizona exchange. Arizona already has some of the heaviest insurance mandates of any state, and Arizona already has one of the highest Medicaid eligibility thresholds in the country, thanks to Prop 204. Despite the passage of the Arizona Health Care Freedom Act in 2010, we cannot count on Arizona’s “conservative” political culture to protect consumer choice in health care.

Claim: This will all be over in June, when the U.S. Supreme Court strikes down ObamaCare

Reality: If the game is really over, the Brewer Administration should shut down the exchange now, rather than continue to waste our federal taxpayer dollars. Unfortunately, even if a conservative majority on the Supreme Court strikes down the Individual Mandate, a separate majority may allow the rest of ObamaCare, including the exchange system, to survive.

Claim: What we do in Arizona won’t affect the future of ObamaCare at the federal level.

Reality: ObamaCare, as enacted, is dependent upon the creation of state exchanges for the distribution of federal subsidies. Because of drafting flaws in the legislation, federal subsidies cannot flow through federally-established exchanges. If federal subsidies are allowed to flow to Arizona health care consumers, ObamaCare will become much harder to repeal politically, because hundreds of thousands of Arizonans will become addicted to federal subsidies. Further, as enacted, ObamaCare penalizes employers with fines only for employees who get subsidies–which they will only get if Arizona sets up an exchange.

Claim: We will have to enact the exchange to find out how much it will cost. (A paraphrase of the testimony of Arizona health care czar Don Hughes* on November 2, 2011.)

Reality: That Pelosi-esque statement is technically true. No one really knows how many tens of millions of dollars an Arizona exchange will end up costing AZ families and businesses in new taxes or fees. But the experience with RomneyCare suggests that it will end up being many tens of millions of dollars annually. Further, by helping ObamaCare to survive politically, the creation of an Arizona exchange will help to lock in the new ObamaCare Medicaid mandate, which the Joint Legislative Budget Committee has projected to cost close to $400 million a year.

Claim: Arizona Legislators cannot do nothing. We must take responsibility and do our part.

Reality: With RomneyCare as a guide, we know that the exchange system and the new mandates will cause insurance premiums to skyrocket. This is going to be a disaster. Arizona Legislators do not want to have their fingerprints on this thing. We should let the Federal Government take the clear blame for the coming disaster, so that the system will be easier to fully repeal.

Claim: Legislators don’t need to think about this right now. There is no legislation pending.

Reality: Arizona’s Legislators cannot go into ostrich mode on this important issue. Legislators must take a stand now and pledge to fight the exchange. If the U.S. Supreme Court allows the exchange system to stand, Gov. Jan Brewer will likely call a special session this fall (probably the after GOP primaries in August…) to implement the exchange. We must start fighting now.

To print out and sign the Pledge, click here.

*To see Hughes opposing the Arizona Health Care Freedom Act in 2009, use this link:


His testimony begins at 3:07.45

“We can make it work if there is an enforceable individual mandate.”

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