I trust the Obama administration more than I trust Arizona with the new health care exchanges.

23 Nov 2012 12:55 pm
Posted by: Donna

The Goldwater Institute is urging Arizona and other states that haven’t decided whether to set up state-run private health insurance exchanges under the Affordable Care Act to opt out of it and let the feds set them up. Their reasoning for that seems to be based on their dogmatic belief that government-run enterprises are doomed to failure.

Early on, some state policymakers were misled into thinking that setting up a state exchange would give them flexibility from federal control. There’s also been discussion of urgent “deadlines” states must meet to “comply” with the federal law.

Federal bureaucrats, ill equipped to execute a comprehensive takeover of the nation’s health insurance industry, have been hoping governors and legislatures would buy these stories.

What the feds don’t want states to know is that federal law does not require states to establish exchanges. In fact, there’s no rush to make a decision – states may opt in at any time. If states choose not to set up an exchange, the federal government will have to create and fund one on its own.

I agree that there’s no rush to make a decision! Take your time, Arizona. I’m cool with that! G.I. dislikes the idea of state-run health care exchanges for much the same reasons they dislike state-run public schools – lack of “flexibility”. Yeah well, look how much damage state “flexibility” has done to the schools and social services in the past few years. The Governor and GOP majority in the legislature gave themselves the flexibility to cut thousands of poor adults off Medicaid. Speaking of which, at this point the Medicaid expansion portion of Obamacare, which would provide coverage to people up to 133% federal poverty level, remains undecided in Arizona. Given the hostility of conservatives toward anything from the government that might help people they consider moochers, I don’t expect them to go along with the expansion, even on the generous terms the Obama administration is offering. So why should we trust them to run the insurance exchanges? I’m in complete agreement with Jon Walker, who writes extensively on health care policy on Fire Dog Lake (a liberal site often intensely critical of Obama) on why it’s better to let the feds establish and run the exchanges:

Financially this should be far more efficient. Creating one of these exchanges is an incredibly expensive IT investment but adding more people to an existing system should be a rather small cost. It should be much cheaper for the federal government to just build one system and use it in 30 states, rather than make 30 states waste money building 30 different systems.

On a practical level having governors opposed to Obamacare not involved in running the exchanges should produce better outcomes. I would much rather the exchange I’m using be run by the Obama administration, which is heavily invested in trying to make the law work, than have it run by Republican governors, who are ambivalent about the law’s success.

Politically it is seems as close to a win-win as you can get in the situation. Republican officials who think the law won’t work get to wash their hands of it, Democrats get to try to prove it can work, and regular people will still have access to an exchange.

Precisely. A big added bonus is that these federally-run exchanges will be under the Obamacare contraception coverage mandate. Women getting their insurance through them will get birth control with no co-pay and Debbie Lesko and Cathi Herrod won’t be able to do a damn thing about it!


  1. Comment by Mike Slater on November 24, 2012 2:46 pm

    Let the feds run it. It will be a mess like the Post Office.

  2. Comment by Laurel on November 26, 2012 7:47 am

    Mike, the USPS is a mess because Congress passed a law in 2006 stating the USPS must prefund their pension fund 75 years in advance, and that they must do so within 10 years.

  3. Comment by Liberal Democrat Friend of Bruce Ash on November 26, 2012 11:04 am

    the post office is great, for less than the price of lunch I can pretty much send most sendable things across the country and have it get there in a matter of days.

    if health insurance was run the same way we’d probably barely notice it, the way we barely notice how the USPS accurately moves millions or possibly billions of important pieces nationwide every day.

  4. Comment by Mike Slater on November 26, 2012 2:54 pm

    The USPS runs a deficit every year. Do we really want the government running health care?

  5. Comment by Laurel on November 27, 2012 10:07 am

    Mike, the USPS has run a deficit every year as a direct recult of the postal act of 2006.

    And the ACA is not government run healthcare. It is simply a requirement that EMPLOYERS provide health insurance to their employees and that those insurance companies spend 85% or more of their premiums on actual healthcare and not overhead. It also stops the practice of lifetime caps, dropping people from insurance because they utilitize to many of their own premiums that they paid for for their own healthcare, and prohibits insurance companies from denying coverage to those with pre-existing conditions. The only area where the federal government will become involved is in those states who refuse to set up their own exhanges for people to buy their own PRIVATE health plan if the company they work for is small enough that they are not required to provide insurance. Not even the health plans in the exchanges will be government run plans; they all come from insurance companies like BCBS, Aetna, etc.

  6. Comment by Mike Slater on November 27, 2012 3:01 pm

    Laurel, employers will drop their health care plans and opt to pay the fine instead. It will be cheaper for them.

    Why would an insurance company want to cover those with pre-existing conditions? That would be like not having home owners insurance until your house is on fire and them calling an insurance company for coverage.

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