Conservatives Debate Exchanges

Douglas Holtz-Eakin, former director of the Congressional Budget Office and chief domestic policy adviser to John McCain’s presidential campaign, created quite a stir last week when he urged states to set up their own health insurance exchanges under ObamaCare. This is from The Hill:

The healthcare law envisions each state setting up its own exchange — a sort of Expedia or Orbitz for health insurance — but authorizes a federally run fallback in states that don’t act on their own…But Republican governors have rejected state-based exchanges, saying they won’t play any part in helping to implement a law they oppose.

Operating a state-based exchange gives the states the power to make key decisions about their marketplace, such as whether to negotiate directly with insurance plans or open the market up to any plan that meets certain minimum criteria. States could also decide whether to preserve or eliminate the individual market outside of their exchanges, or require non-exchange plans to meet the same criteria as exchange plans.

Punting those decisions to the federal government is “choosing a slippery slope toward precisely what liberal Democrats want: a federally controlled healthcare system that would be the first step toward European-style, single-payer healthcare,” Holtz-Eakin wrote.

Holz-Eakin’s NRO piece. Jim Capretta and Yuval Levin give the other side. My debate with Linda Gorman on this issue.

Comments (9)

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  1. Ken says:

    I think you and Doug are probably right about this.

  2. Kyle says:

    I agree. If it’s going to happen, it needs to be decentralized.

  3. Slater says:

    “choosing a slippery slope toward precisely what liberal Democrats want”

    Not a big fan of these changes.

  4. Devon Herrick says:

    Critics argue that state Health Insurance Exchanges are so hamstrung with federal regulations that there is really no upside to a state running their own exchange. On the other hand, the downside is immense — with all unfunded mandates and cumbersome regulations. I’m not sure anyone knows the answer. But I think Doug Holtz-Eakin has a point worth exploring. But time will tell which faction is correct.

  5. Joe S. says:

    Ditto Ken.

  6. seyyed says:

    states are going to need a lot more time to set up the exchanges

  7. dennis byron says:

    If those who oppose a state-run exchange need a proofpoint, look to the Massachusetts Connector Authority web site. It is a travesty of web design and intuitive use. For people like me who had to use it (before I reached Medicare age), it is even worse than one might think just looking at it.

    – You cannot purchase a policy without contacting a customer service representative (which would be a big problem if the Connector was successful but see below)
    – You cannot pay a bill without going to another web site.
    – (And — and I have no objection to this — you cannot buy insurance any old time but only during open enrollment except for special situations, so the site sits somewhat unused most of the time.)

    More important, Massachusetts paid a Texas company tens of millions to set up and run the RomneyCare web site and yet very few people actually use it to buy insurance. The last report (November 16, 2012) was that about 20,000 policies covering well under 1% — 42,000 — of the 6,500,000 people living in Massachusetts were bought through the Massachusetts exchange.

    – Of those 42,000 people covered, only about 4,000 were from small businesses whereas over 600,000 people buy insurance in the Bay State through small groups with no need for an exchange.

    – About half of the 70,000 people that buy insurance individually in Massacuhsetts do buy it through the Connector web site but primarily because their insurance companies saw a good deal when the exchange was debuted and stopped selling to individuals directly, offloading their marketing costs on to the state (and the insured of course).

    The Massachusetts exchange web site and the bureaucracy that goes with it is a huge duplicative waste of money and other states should do all they can to avoid the expense.

  8. Claudia says:

    It’s been proven to all of us, whether Democrats, Republican, liberals, coservatives, liberalists…that handing any decisions to the federal government is bound to result in something beneficial only to them, the Democratic party. They have proven that they only look after their own best interest no matter who they harm or negatively affect in the long run, or even short run. That’s called socialism, and the only way to avoid it and keep these negative ways from affecting us on a daily basis is to let states make their own decisions (they know exactly what they need and what their best approach is to every uncertainty they may have) and let the federal government out of it. They have proven to be no good.

  9. August says:

    Also, the federal law only allows penalties to employers if employees receive state subsidies, not federal.

    http://www.forbes.com/sites/aroy/2012/08/06/the-irs-employer-mandate-loophole/