OBAMACARE EXCHANGES
www.fayobserver.com/articles/2011/04/06/1082818?sac=Opin
Don’t rush ObamaCare exchange
by Joel Coletti, John Locke Foundation
Fresh from their vote against ObamaCare’s individual mandate, state legislators began work to implement an ObamaCare health insurance exchange. Legislators who took a principled stand against one form of federal overreach are now complicit in another. Why?
Republicans, Democrats, health insurers, care providers and employers of all sizes contend the federal government will swoop in and run a health insurance exchange if North Carolina has not made progress to establish one by January 2013. I believed this myself until recently. Now I know this is a phantom menace.
Under ObamaCare, states or the federal government must create “exchanges,” the only place where families earning less than $88,000 per year could use federal subsidies to buy health insurance. Policies sold through an exchange would have to meet currently undefined federal rules to become “qualified health plans.” Whatever form the rules take, they will make insurance more expensive, as you and your employer may have noticed with changes already linked to ObamaCare.
Federal control
Despite fears about federal control, in the end it will not matter who establishes an exchange. The federal government will ultimately control everything the exchange does. Federal Health and Human Services Secretary Kathleen Sebelius has specified four areas of flexibility available to states: They can bar insurers from participating, require more benefits, opt out of the exchange to create a single-payer system, and define who sits on the board of the exchange and its “operational philosophy.” This is not real flexibility. There is no room to opt out of mandates and regulations that pre-empt competition and innovation.
North Carolina has taken a $1 million federal grant to develop and start operating the state’s exchange. This money serves as the carrot to the stick of a federally run exchange, but it dries up by January 2015, if not sooner. The exchange must be self-sustaining by that point, which could mean big costs for taxpayers.
Rep. Jerry Dockham, who sponsored the leading House bill, has said the state can create an exchange “faster and at lower cost” than the federal government. This suggests that if the state does not meet federal deadlines, it will still take longer for the federal government to have an exchange up and running in North Carolina. In other words, the state faces no pressure to pass an exchange bill this year.
Clarification needed
Exchanges are complex, costly and confusing. With no time constraint, it makes sense to delay creating one until constitutional questions and federal rules are settled. A study committee would help clarify what an exchange must do and how it should do it. At the very least, legislators need to understand how much it will cost taxpayers to make an exchange self-sustaining.
The two governors with the most knowledge of health care, Rick Scott in Florida and Bobby Jindal in Louisiana, have both rejected similar grants for their states. Grass-roots opposition in Georgia, Montana and South Carolina has sidelined exchange bills in those states. Opposition continues to grow nationwide.
If legislators are still concerned about a federal takeover of a federally mandated, federally defined exchange, they could pass a simple piece of legislation that would take less than a page instead of the pages of rules needed to create another bureaucracy.
Something as simple as compelling the insurance commissioner to revoke or suspend the license of any insurance company that tries to sell health insurance in North Carolina through a federal exchange. It would still provide the opportunity for the state to create an exchange if one makes sense, while removing the federal threat.
Haste is the enemy of good public policy. Former Democratic U.S. House Speaker Nancy Pelosi said Congress had to pass ObamaCare to see what was in it. Republican leadership in the North Carolina General Assembly should apply a higher standard to such a critical piece of ObamaCare implementation.
Wait. Study. See what the Supreme Court says. If ObamaCare really is constitutional, there will still be time to act. If it’s unconstitutional, we would have saved a lot of time, money and effort on an unnecessary bureaucracy.
