[UPDATE: this from the comment section, "the WORST case. 3) Federally Facilitated Exchange...the state partners with the Feds, allowing them to come in the back door while shouting out the front door that we are against ObamaCare. FEDs come in under the State authority and do not have to go to the US Congress for subsidies" If this is what Daugaard is implementing, then it will be even worse than setting up our own exchange. We have to refuse that (the Federal Exchange) too in order to get it kicked back to Congress before the IRS rule discussed below comes into play.]
[UPDATE: The comment left by Lora Hubbel is correct. I found it here:
First, the federal law says each State "shall" establish a health insurance exchange in their State....but Congress CANNOT require states to act. That would be federal commandeering of states which is unconstitutional, as underscored by the Supreme Court ruling on Medicaid. The ACA requires a single federally-run Exchange to be created for use by citizens in states that refuse to install a "state" exchange (website portal). This has also been called a "federally-facilitated" exchange. However, States can refuse to share the data necessary to allow the Federal Exchange to function.
Second, there are no "state" exchanges. Every exchange is a website portal used by the federal government to reach into each state for control over health care and health insurance. The portal is controlled by the federal government through myriad rules and regulations. It is what Texas Governor Rick Perry called one of the "brazen intrusions into the sovereignty of our state"
States say no. State-run exchanges are intended to be complex federally-regulated website portals linked into a National Exchange (see diagram below) -- a highly sophisticated IT infrastructure of data-sharing, financial transfers and federal monitoring and federal regulatory controls installed for the purpose of taking over the health care system in each state. Only 13 states have said yes (Aug 2012). Many states have already said no. Every state should follow their example and just refuse to cooperate, capitulate, or comply.]
I have joined others who believe Governor Daugaard was setting up a state insurance exchange. Daugaard's response was that they were only planning one in case they are required to if ObamaCare stands. Now we know ObamaCare stands, but Daugaard has chosen to not implement a "state" exchange:
Daugaard, along with many other Republican governors, opposed the new law and had hoped it would be repealed if Obama was not re-elected. The new health law's first post-election deadline is Friday, when states must notify the federal Health and Human Services Department whether they will set up an online marketplace for residents and businesses to use in shopping among competing policies. Daugaard announced in September that South Dakota instead will let the federal government operate and pay for the online system, known as an exchange. Coverage is slated to begin in 2014.
So why did Daugaard change his mind and is now letting the federal government set up the exchange? Could it be this:
Those governors that are today considering whether or not to implement a state-run health insurance exchange under the new health care law may hold the fate of Obamacare in their hands.
Under the law, state exchanges would be responsible for dispersing some $800 billion to private insurance companies. There is no question that if governors decide to implement such an exchange, they will be aiding and abetting the implementation of this law.
That is because implementing a state exchange neutralizes the ability of businesses to fight the job-killing employer mandate.
According to a recent study by Case Western Reserve University School of Law’s Jonathan Adler and the Cato Institute’s Michael Cannon, “Taxation without representation: The illegal IRS rule to expand tax credits under the PPACA.” a federal exchange that would be implemented in the stead of a state exchanges “lacks statutory authority” to dispense the insurance subsidies.
In the study, Adler and Cannon make the case that “An Internal Revenue Service (IRS) rule purports to extend these tax credits and subsidies to the purchase of health insurance in federal exchanges created in states without exchanges of their own.”
The problem, according to Adler and Cannon, is that the “text, structure, and history of the Act show that tax credits and subsidies are not available in federally run exchanges. The IRS rule is contrary to congressional intent and cannot be justified on other legal grounds.”
This creates a real problem legally for the Obama Administration in states that a federal exchange is implemented. By not implementing the state exchange, governors such as Rick Perry in Texas or Rick Scott in Florida are effectively giving employers in those states the standing to sue against the new IRS rule.
In other words, it creates an avenue to fight against the implementation of the law. For employers that do not wish to be under Obamcare’s thumb, such a move at least gives them a fighting chance.
But if the exchange is implemented by the states, employers in those states will not have any chance at all to challenge the law.
That angle also may the reason why Daugaard is not following the demands of the South Dakota Corporate Medical Establishment:
Now that President Barack Obama's re-election has cleared the way for the full implementation of his health care law, doctors and hospitals in South Dakota are urging the state to expand its Medicaid program so thousands of additional low-income residents can receive coverage.
But Gov. Dennis Daugaard says any expansion of coverage is unlikely for at least several years while the potential costs are examined.
The South Dakota Association of Health Care Organizations said about 48,000 uninsured residents will be left behind if South Dakota doesn't ease its eligibility requirements for Medicaid, the government health care program for the poor.
"If we're left out of the benefits that can come from the Affordable Care Act, how do we take care of the people of South Dakota who are below the federal poverty level?" said Dr. Rob Allison, of Pierre, president of the South Dakota State Medical Association.
The federal law seeks to reduce the number of uninsured by requiring those who can afford coverage to obtain it. But the Supreme Court ruled that states cannot be required to expand Medicaid to cover more of those who can't afford policies.
Daugaard said he would consider expanding Medicaid after more is known about the impact and how much flexibility the state will have in administering the program.
"You can wait, evaluate your budget situation, see how your economy is going, and see how your Medicaid costs are coming into control," the governor said.
It is now more clear that the real push behind IM15 was the implementation of ObamaCare and ObamaCore (more to come on the education component). South Dakota voters said no to additional state taxes, but how many understood that they may also have complicated the implementation of the ObamaCare/ObamaCore agenda whose purpose is to increase centralized control of citizens from cradle to grave?