Quantcast

Should states accept health insurance exchanges?

Published: Sunday, July 5 2015 2:11 a.m. MDT

The Utah State Legislature meets on Capitol Hill during the 2013 session. (Tom Smart, Deseret News) The Utah State Legislature meets on Capitol Hill during the 2013 session. (Tom Smart, Deseret News)

Yes: Supporting the aca system will help reduce costs and corruption

WASHINGTON — The Affordable Care Act of 2010 — widely known as Obamacare — requires states to set up exchanges where individuals and small businesses can purchase insurance.

The purpose of the exchanges is to help implement the reforms. For example, most of the people who will purchase insurance in the exchanges will be eligible for some sort of tax-credit to make their insurance more affordable. Also, the insurance plans must be certified so that they meet the requirements of the ACA.

The ACA also provides for an expansion of Medicaid to households earning up to 133 percent of the federal poverty line. The exchanges can help determine who is eligible for Medicaid or CHIP (the Children's Health Insurance Program), or for subsidies to purchase insurance.

American flags fly at half staff on the National Mall in front of the U.S. Capitol in memory of the victims of Saturday's mass shooting in Arizona, January 10, 2011 in Washington.   (Win Mcnamee, Getty Images) American flags fly at half staff on the National Mall in front of the U.S. Capitol in memory of the victims of Saturday's mass shooting in Arizona, January 10, 2011 in Washington. (Win Mcnamee, Getty Images)

The ACA gives state governments the responsibility to set up exchanges. But a number of state governments have declined to do so, thus leaving this responsibility to the federal government.

In many cases this is for ideological or political reasons — these are Republicans who see their refusal to create the exchanges as an act of defiance against Obamacare.

But defying health care reform in this way will not get them anywhere; they will simply turn the job over to the federal government.

This will disenfranchise their constituents from having a say in how the exchanges are designed. Since states have different laws regulating insurance and different demographicsthis does not seem like a smart move.

Some of these state governments are also rejecting the Medicaid expansion, and federal money that goes with it. This will simply deny many of their citizens access to Medicaid — including 1.4 million people in Texas.

Obamacare will bring some important changes for victims of our healthcare system, some of which are already in effect. Among them:

People with pre-existing health conditions will no longer be denied insurance and important preventive care will be free.

Most insurance companies will be required to cover treatment for mental health and substance abuse.

Most important, an estimated 60 percent of the nation's 50 million uninsured will have health insurance.

But that still leaves tens of millions of Americans falling through the cracks. We also have the most expensive health care system in the world — paying about twice as much per person as in other high income countries, with much worse health outcomes in areas like life expectancy and infant mortality.

Most of the waste comes from higher administrative costs — one study estimated these at 31 percent for the United States, as compared with 16.7 percent for Canada's universal, single-payer system.

The ACA has provisions for reducing costs, and some will be effective; but it will be difficult in a system with hundreds of private insurers who will still find it profitable to expend resources to avoid paying for the sick and injured, and finding healthier groups of people to insure.

The most effective, efficient and equitable system is a single-insurer that covers everyone — as we have in Medicare for Americans over 65.

For this reason the state of Vermont is designing an insurance exchange system under the ACA that will serve as a prelude to a single payer, universal statewide health care system; it is estimated that this will reduce health care spending in Vermont by 25 percent while insuring all residents.

The people of Vermont deserve congratulations and support for their years of grass-roots activity that could make this a reality as early as 2017. The only reason we don't have this nationwide is because of the corrupting power and influence of the pharmaceutical and insurance corporations.

If Vermont succeeds, other states and then the federal government could follow, as happened in Canada.

Mark Weisbrot is co-director of the Center for Economic and Policy Research.

No: let U.S. build flawed system and then duck consumers' flak

WASHINGTON — The post-election rollout of the Obama administration's plans to implement insurance exchanges in time for January 2014 enrollment has met substantial state government opposition, raised more questions than answers and flashed warning signs of a train wreck ahead.

Thirty-three states — a clear majority — still are not fully on board with running their own exchanges to comply with the dictates of the Affordable Care Act. Most of those states — as many as 23 — would rather leave the daunting implementation process entirely in the hands of federal officials.

The strong resistance of many state governors — who are being asked to build the key regulatory architecture for Obamacare — is fully justified.

While it may simply be good short-term politics for Republican state officials looking to avoid the blame for ongoing complications and contradictions that were made in Washington, it should also reinforce a more principled strategy to support a better version of competition for diverse health insurance products.

The fuzzy sales rhetoric for ACA-style health exchanges masks their real nature. The blueprint for implementation of Obamacare goes far beyond the modest restructuring of problematic portions of the health insurance market.

The more ambitious political agenda includes three major goals:

Expanding the federal government's regulatory control over private health insurance,

Facilitating substantial income redistribution with new premium assistance subsidies,

Establishing greater voter loyalty from constituencies increasingly dependent on government-brokered channels for health care.

The ACA's architecture adopts only the appearance, but not the reality, of private sector delivery and state government administration in order to disguise and carry out most of this radical takeover plan.

State-administered health exchanges are key mechanisms to enforce mandates requiring employers to provide ACA-approved coverage, and individuals to purchase it. The exchanges will have every incentive to limit competition from private market alternatives. They also will place maximum emphasis on expanding enrollment in an unreformed Medicaid program.

The Obama administration insists it can deploy initial versions of exchanges run by the federal government in holdout states in time for 2014. But the ability to put in place systems to coordinate the flow of integrated data necessary for eligibility and payment operations, let alone for adequate customer service, remains questionable.

The White House desperately needs the infrastructure and experience of state-level officials to pull off an unprecedented nationwide rollout. And it wants state governments to serve as political heat shields to absorb most of the blame and burden for what is likely to go wrong.

State opponents of ACA-style exchanges should go beyond complaining about unclear rules and high costs.

First, they should support the litigation strategy of the state of Oklahoma, which is challenging in federal court the validity of an Internal Revenue Service rule that authorizes federally run exchanges to distribute ACA premium assistance tax credits to their enrollees.

Second, for an alternative version of coverage expansion in states, governors should insist on mechanisms that are simpler, more consumer-friendly and scaled back to work within existing capabilities and institutions.

If state opponents of ACA exchanges decline to be merely tax-collecting branch offices for the federal welfare state's new insurance mandates, they can force federal officials to return to the negotiating table with states and their constituents as equal partners.

Thomas P. Miller is a resident fellow at the American Enterprise Institute.

Copyright 2015, Deseret News Publishing Company