Knowing that many states, including Michigan, will be under Republican single-party rule in 2011, certain business interests are making unlikely arguments in favor of Obamacare exchanges.
One of Gov. Rick Snyder’s 10 points
to “reinvent” Michigan is to move the state to a more “patient-centered model”
of delivering health care. But Michigan cannot achieve this goal unless the
Patient Protection and Affordability Act is undone. The federal health care law
is unpopular, unwieldy, expensive, unconstitutional, and soon to be under
attack by a congressional majority committed to repeal.
The good news is that Michigan can
play an important role in defeating this top-heavy federal takeover of its
residents’ access to health care. The Obama administration expects states to do
much of the law’s dirty work, presuming that states will establish “exchanges”
to limit the health insurance choices of many of their residents.
The letter of the law prescribes
states’ “flexibility” in structuring exchanges, and some believe that it is
possible to design an exchange that increases consumer choice. Two states,
Massachusetts and Utah, already have exchanges. Pre-Obamacare, exchanges were
suggested as a way to get around the major government failure in American
health care: Congress’s granting monopoly control of our pre-tax health dollars
to our employers, which limits our choices.
Some claim that the Utah Health
Exchange is a consumer-friendly model that can blunt the most harmful
consequences of nationalized health care. Utah’s exchange, however, has been a
disappointment. Although 20 businesses enrolled on the first day of
operations in August 2009, only 13 remained enrolled by the end of 2009. As a
result, the exchange is being re-launched with new rules in 2011.
Knowing that many states, including
Michigan, will be under Republican single-party rule in 2011, certain business
interests are making unlikely arguments in favor of Obamacare exchanges. These
interests include information technology vendors and consultants, health
insurers who believe that they can dominate an exchange to the detriment of
smaller competitors, and brokers who hope to get paid by government to serve as
“navigators” in the exchanges.
Some lobbyists claim that states
can drop out of Medicaid and drive all of their former dependents into
exchanges, where they will enjoy budget-busting federal tax credits. Even if
this were possible, simply exploiting Obamacare to transfer liabilities to the
federal level hardly solves the national challenge of out-of-control health
care spending. However, the perverse incentives resulting from such a “reform”
would surely dissipate Michigan politicians’ will to undo Obamacare.
Appealing to conservative
sentiments, lobbyists also warn that if states don’t establish their own
exchanges by January 2013, the federal government will do it for them. This is
highly unlikely. Kathleen Sebelius, the U.S. Secretary of Health & Human
Services, has already missed many deadlines demanded by the legislation. In
January, the new Congress will take away her checkbook, further diminishing her
ability to roll out Obamacare.
The greater risk is that Michigan would establish an
exchange that it believes blunts the worst effects of the federal takeover.
Given its unpopularity, Secretary Sebelius is likely to approve exchanges for
the short term, making Obamacare appear less harmful than it really is.
However, if advocates of repeal fail over the next two years, Sebelius will
surely sweep away any “consumer-friendly” accommodations with a vengeance.
President Obama and Sebelius want to eliminate all private choice of health
care in favor of a government monopoly. Once the exchanges are up and running,
the administration will be able to impose whatever arbitrary regulations it
Michigan would also find that an
exchange is very expensive to operate. Massachusetts’ Commonwealth Connector
spent more than $26 million on vendors and contractors in 2009, and $3.4 million
on employee compensation. This comprises fully 3.5 percent of the money that
businesses and enrollees paid into the exchange.
Any state establishing an exchange
is making a one-way, lose-lose bet. If Obamacare persists, exchanges will become bloated administrative
nightmares. If it is defeated, states will have wasted time and energy that
should have been directed toward that effort. Obamacare is the president’s
problem. Don’t make ?it Michigan’s,
R. Graham is director of Health Care Studies at the Pacific Research Institute
and an adjunct scholar with the Mackinac Center for Public Policy, a research
and educational institute headquartered in Midland, Mich. Permission to reprint in whole or
in part is hereby granted, provided that the author and the Center are properly