Are health insurance exchanges a silver lining in ObamaCare, or an irrelevant distraction?
You might make the case that health insurance exchanges are a good thing. They allow someone to get insurance through someplace other than an employer. More choice, portability, what’s not to like?
Many people have been intrigued by the exchanges set up in Massachusetts and Utah. Generally, people who have favored ObamaCare think that Massachusetts is a decent model, while opponents have thought that Utah is a better one. The difference is an important one, since under the new health care law, states are told to create insurance exchanges, markets with specific government regulations created for the insurance products bought and sold there.
In the best-case scenario, the a properly regulated exchange will be the silver lining of ObamaCare: A person can take money from his paycheck, perhaps combined with a taxpayer subsidy, and buy, from a number of companies, a policy that will follow him from job to job. No more depending on what your corporate HR department decides, or having to switch doctors because your employer switched to a new insurer that uses a different network of doctors.
But against this rosy scenario, John R. Graham of the Pacific Research Institute offers a caution, and counsels states to reject exchanges altogether. Opponents of ObamaCare have generally pointed to the Massachusetts Connector as an example of the problems with a state-created exchange: The number of people with insurance may increase, but public subsidies spiral out of control, and the newly insured have a hard time actually getting to see a doctor.
Maybe Utah offers a better example? I’ll spare you the details, but the regulations imposed there are more sensible and sustainable.
Or are there?
Graham says, “While the Utah Health Exchange is vastly superior to Massachusetts’ Commonwealth Connector, it has not proved successful.” Its most promising feature, which allows a husband and wife to combine money from both of their employers to purchase a single policy independent of either employer, hasn’t actually been put into place yet. And going forward, it’s unclear whether Utah can afford the subsidies and operating costs needed to make the exchange work.
The national political situation, meanwhile, makes prospects for state-based exchanges problematic:
States establishing Obamacare exchanges are making a one-way, lose-lose bet. If Obamacare persists, exchanges will become bloated administrative nightmares. If Obamacare is defeated, states will have wasted time and energy that should have been directed towards that effort. Obamacare is President Obama’s problem.
He concludes, “Don’t make it your state’s problem.”
Graham encourages state leaders to encourage Congress to repeal the law. In Kentucky, for example, Rep. Jim Gooch Jr., has introduced a measure that says simply, “JOINT RESOLUTION urging the United States Congress to repeal the Affordable Care Act of 2010 (ACA).”