health insurance exchange
Written by Michael F. Cannon, Director of Health Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.
The Washington Post reports:
By the end of this week, states must decide whether they will build a health-insurance exchange or leave the task to the federal government. The question is, with as many as 17 states expected to leave it to the feds, can the Obama administration handle the workload.
“These are systems that typically take two or three years to build,” says Kevin Walsh, managing director of insurance exchange services at Xerox. “The last time I looked at the calendar, that’s not what we’re working with.”…
The Obama administration has known for awhile that there’s a decent chance it could end up doing a lot of this. Now though, they’re finding out how big their workload will actually become.
Betcha didn’t see that coming.
Part of the reason the workload is so heavy? “Buying health insurance is a lot more difficult than purchasing a plane ticket on Expedia.” You don’t say. But I thought that’s why we needed government to do it.
With the mid-December deadline looming, New Jersey Gov. Chris Christie, who is riding good post-Sandy poll numbers, has vetoed legislation that would have implemented ObamaCare’s health insurance exchange, citing the potential cost to taxpayers:
New Jersey Gov. Chris Christie rejected a state-run health insurance exchange Thursday, paving the way for the federal government to step in and run one.
Christie — who was in Washington on Thursday pushing for Hurricane Sandy aid — rejected a bill passed by the Democratic state Legislature that would have built an exchange, a key part of the president’s health care law that makes available subsidies to help low- and middle-income individuals purchase coverage in new health insurance markets starting in 2014.
Echoing complaints from other Republican governors who have declined to build the key component of the president’s health law, Christie stressed unanswered questions and potential costs.
“We will comply with the Affordable Care Act but only in the most efficient and cost-effective way for New Jersey taxpayers,” he said in a statement.
But he said the federal government hasn’t told states what they need to make the assessment.
“Thus far, we lack such critical information from the federal government. I will not ask New Jerseyans to commit today to a state-based exchange when the federal government cannot tell us what it will cost, how that cost compares to other options and how much control they will give the states over this option that comes at the cost of our state’s taxpayers.”
Following up on this morning’s story, the Department of Health and Human Services (DHHS) has extended the deadline for states to decide whether or not to participate in the ObamaCare’s state health insurance exchanges (emphasis mine):
Responding to governors who said they needed more time, Health and Human Services Secretary Kathleen Sebelius gave states until December 14 to apply to operate their own exchanges. The deadline had been Friday.
The Obama Administration had argued that states were required to setup the exchanges, which will cost states anywhere from $10 million to $100 million to implement. The Supreme Court, however, shot that argument down, allowing states the option to participate in both the exchanges and Medicaid expansion, which will be even more costly to taxpayers.
As of this morning, 19 states have declined to participate in the health insurance exchanges and at least a few more are expected to opt-out.
Many opponents of ObamaCare believed that the battle was lost after the Supreme Court ruling that upheld the heart of the law — the individual mandate — this summer and after President Obama won re-election last week.
While these events all but ensure that the law will go into effect as planned, the Supreme Court’s decision did give states the ability to fight back against ObamaCare by allowing them to opt-out of the health insurance exchanges, which would cost millions for each state to implement and give the federal government control over picking and choosing what plans could be sold.
Today is the deadline for states to tell the federal government where or not they’re going to participate in the exchanges and the expansion of Medicaid, which is even more costly to taxpayers. Of course, this deadline is meaningless. As Michael Cannon recently explained it “is no more real than the ‘deadlines’ for implementing REAL ID, which have been pushed back repeatedly since 2008.”
Before the Supreme Court ruling, Cannon explained why the exchanges are a terrible idea and how states can limit the impact of the law by refusing to participate and how it could be good for states because it will make the cost of doing business cheaper:
While the economy figures to be the main factor of this year’s election, outside groups are planning to spend millions in ads in campaigns for Congress over ObamaCare. And despite the Supreme Court upholding ObamaCare last month, there may be a way for Congress to bring down the law even without fully repealing it. Over at the Cato Institute’s blog, Michael Cannon explains why states, many of which are already balking at Medicaid expansion due to budgetary concerns, are refusing to create the exchanges may do just that:
It turns out that ObamaCare makes an essential part of its regulatory scheme—an $800 billion bailout of private health insurance companies—conditional upon state governments creating the health insurance “exchanges” envisioned in the law.
This was no “drafting error.” During congressional consideration of the bill, its lead author, Sen. Max Baucus (D-MT), acknowledged that he intentionally and purposefully made that bailout conditional on states implementing their own Exchanges.
With the Supreme Court upholding the worst parts of ObamaCare, many are again speculating on the budgetary impacts of the law. We know that the price tag for the law was $1.76 trillion dollars, according to a revised estimate by Congressional Budget Office (CBO) published back in March; up from the original estimate of under $1 trillion when the law was passed in March 2010. Charles Blahous found that the law would add $340 billion to the deficit over the next 10 years.
But the CBO now says that the laws impact on the deficit, given last week’s Supreme Court ruling, is unclear, but they are diving into the numbers:
The nonpartisan Congressional Budget Office said Thursday that it will “take some time” to assess the budget impact of a Supreme Court ruling upholding President Obama’s healthcare reform.
“CBO is in the process of reviewing the Supreme Court’s decision related to the Affordable Care Act to assess the effect on CBO’s projections of federal spending and revenue under current law. We expect that this assessment will probably take some time,” CBO Director Doug Elmendorf said in a terse statement.
During the Republican presidential primary season, Mitt Romney was unable to convince conservatives and Tea Party-minded voters to coalesce behind his campaign for various reasons. Perhaps most of all was the health care reform law Romney pushed during his one term as Governor of Massachusetts, which would later serve as the blueprint for ObamaCare.
But now that Romney had mathematically secured enough delegates to become the Republican nominee, all is forgiven, right? Perhaps in some ways, but many conservatives are employing the adage made famous by Ronald Reagan — “trust, but verify.” Romney, however, isn’t make it easy for them. Recently, he chose former Utah Gov. Mike Leavitt to head his transition team should he defeat President Barack Obama this fall, a pick that has some conservatives reeling, as Philip Klein explains: