The Blog

Christie Vetoes Bill Creating Obamacare Exchange in New Jersey

2:39 PM, Dec 6, 2012 • By JOHN MCCORMACK
Widget tooltip
Single Page Print Larger Text Smaller Text Alerts

Chris Christie is the latest governor to refuse to set up an Obamacare exchange in his state. Here's his press release announcing his veto today: 

“We will comply with the Affordable Care Act, but only in the most efficient and cost effective way for New Jersey taxpayers. Such an important decision as how to best move forward for New Jerseyans can only be understood and reasonably made when fairly and fully compared to the overall value of the other options. Until the federal government gives us all the necessary information, any other action than this would be fiscally irresponsible,” said Governor Christie. “Thus far, we lack such critical information from the federal government. I will not ask New Jerseyans to commit today to a State-based Exchange when the federal government cannot tell us what it will cost, how that cost compares to other options, and how much control they will give the states over this option that comes at the cost of our state’s taxpayers.” [...]

“Financing the building and implementation of a State-based Exchange would be an extraordinarily costly endeavor,” continued Governor Christie. “While the federal governmental has enabled states to apply for grant funding to cover some of the initial costs of such an endeavor, the total price for such a program has never been quantified, and is likely to be onerous. Without knowing the full scope of which Exchange option would be most beneficial and cost efficient for New Jerseyans, it would be irresponsible to force such a bill on our citizens.”

New Jersey becomes the twenty-second state to decline to set up its own Obamacare exchange. As the Cato Institute's Michael Cannon explained in this video, without state-based exchanges "the whole law falls apart":

If a state refuses to set up its own exchange, the Affordable Care Act allows the federal government to set up an exchange in the state--but the law only provides Obamacare subsidies for state-based exchanges. And if the subsidies aren't disbursed, some of Obamacare's tax hikes won't take effect in states that refuse to set up exchanges. Ramesh Ponnuru writes in Bloomberg:

States have another incentive to refrain from setting up exchanges under the health-care law: It protects companies and individuals in the state from tax increases. The law introduces penalties of as much as $3,000 per employee for firms that don’t provide insurance -- but only if an employee is getting coverage with the help of a tax credit. No state exchanges means no tax credits and thus no employer penalties. The law also notoriously penalizes many people for not buying insurance. In some cases, being eligible for a tax credit and still not buying insurance subjects you to the penalty. So, again, no state exchange means no tax credit and thus fewer people hit by the penalty.

The administration’s response to the impending failure of its signature legislation -- a failure resulting entirely from its flawed design -- has been to ignore the inconvenient portion of the law. In May, the Internal Revenue Service decided it would issue tax credits to people who get insurance from exchanges established by the federal government. It has thus exposed firms and individuals to taxes and penalties without any legal authorization. Obviously, that situation sets the stage for lawsuits.

Recent Blog Posts

The Weekly Standard Archives

Browse 15 Years of the Weekly Standard

Old covers