Governors should let US build its flawed system and then duck consumers' flak

Reuters

Internal medicine specialist Dr. Ingrid Chung goes over a medical record chart with a staff (R) before a medical exam at her practice in Chantilly, Virginia, July 30, 2009.

Article Highlights

  • 33 states still aren’t fully on board with running their own exchanges to comply with the dictates of the #ACA.

    Tweet This

  • The strong resistance of many state governors to implement insurance exchanges is fully justified.

    Tweet This

  • The fuzzy sales rhetoric for ACA-style health exchanges masks their real nature.

    Tweet This

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

    Tweet This

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 choice and 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 through 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.

Dozens of state governors have complained primarily about the uncertainties, costs and complexities involved in implementing state-based health exchanges for the first time.

Even the recent wave of regulations issued over the last two months has failed to answer their important questions. The timetable to meet already unrealistic 2014 deadlines has become even shorter.

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.

The legislative text of the health law passed by Congress in March 2010 is quite clear that only health benefits exchanges "established by a state" are authorized to provide such tax credits. If the state's challenge succeeds, federal exchanges will pose little threat to non-participating states.

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. Governors should insist that rule-making for ACA exchanges operate through more formal and final legal channels.

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. Readers may write to him at AEI, 1150 17th Street NW, Washington, D.C. 20036; website: www.aei.org.

 

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Thomas P.
Miller

What's new on AEI

Defeating ISIS: AEI experts weigh-in before the president’s address on Wednesday
image Degrading, defeating, and destroying the Islamic State
image Wealth Building Home Loan: Building wealth through homeownership and retirement savings
image The $3 iPhone
AEI on Facebook
Events Calendar
  • 15
    MON
  • 16
    TUE
  • 17
    WED
  • 18
    THU
  • 19
    FRI
Tuesday, September 16, 2014 | 5:00 p.m. – 6:00 p.m.
The Constitution as political theory

Please join us for the third-annual Walter Berns Constitution Day Lecture as James Ceasar, Harry F. Byrd Professor of Politics at the University of Virginia, explores some of the Constitution’s most significant contributions to political theory, focusing on themes that have been largely unexamined in current scholarship.

Wednesday, September 17, 2014 | 8:10 a.m. – Thursday, September 18, 2014 | 1:30 p.m.
Third international conference on housing risk: New risk measures and their applications

We invite you to join us for this year’s international conference on housing risk — cosponsored by the Collateral Risk Network and AEI International Center on Housing Risk — which will focus on new mortgage and collateral risk measures and their applications.

Thursday, September 18, 2014 | 2:15 p.m. – 3:00 p.m.
Speaker of the House John Boehner on resetting America’s economic foundation

Please join us as Speaker John Boehner (R-OH) delivers his five-point policy vision to reset America’s economy.

Friday, September 19, 2014 | 9:15 a.m. – 11:00 a.m.
Reforming Medicare: What does the public think?

Please join us as a panel of distinguished experts explore the implications of the report and the consumer role in shaping the future of Medicare.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.