The Practical Reasons Not To Set Up Health Insurance Exchanges

Ah Yes, Gimme that Old Time, Government Handout. 

RedState has;
The Practical Reasons Not To Set Up Health Insurance Exchanges
By: streiff (Diary)  |  December 14th, 2012 at 03:32 PM  |

One of the key features of Obamacare is the establishment in each state of a health insurance “exchange” (now known by the abbreviation HIX) where customers would be able to purchase insurance policies eligible for federal subsidies. Much to the surprise of the administration 32 states have declined to participate. The reasons for a majority of states to refuse to participate has less to do with opposition to Obamacare than practical politics.

Predictably, the Obama regime and it enablers are bleating in dismay and accusing Republican governors of betraying their own ideals by refusing to participate in developing state HIX.

Republicans frequently denounce the health-care law as a dangerous overreach of federal power. But now Washington’s role is expanding, and some conservatives charge that Republicans have only themselves to blame.

The vast majority of Republican-led states, faced with a Friday deadline to submit plans for running the insurance exchanges at the heart of the law, have opted instead to relinquish much or all of their control to the federal government.

Just 18 states and the District say they plan to operate their own exchanges, which are slated to begin enrollment in October. In an additional 32 states, the exchanges will be run either entirely by the federal government or a federal-state partnership.

“If you believe in states’ rights and you believe in state control, why would you cede that control?” asked Robert Laszewski, a prominent insurance industry consultant.

A longtime critic of the health-care law, Laszewski argues that Republican state leaders have allowed their ideological and political differences with President Obama to override pragmatic considerations, to the detriment of their residents.

“There’s a lot of cut-off-your-nose-to-spite-your-face going on,” he said.

I don’t know much about Mr. Laszewski’s expertise, outside of suckling at the health care lobbying teat, but it doesn’t extend to politics. The term “state’s rights” is so Democrat and so 1861 that using it in the context of federalism in 2012 is little short of bonejarring. And his assessment of the political landscape marks him as either a knave or poltroon.

New Jersey Governor Chis Christie gave the best reasons for why a state would not participate:

In short, 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 our other options, and how much control they will give the states over this state-financed option.  We will comply with the “Affordable Care Act,” but only in the most efficient and cost effective way for New Jersey taxpayers.  Until the federal government gives us all the necessary information, any other action than this would be fiscally irresponsible.

In essence, the federalist argument for not participating is that the state government is being directed by the federal government to take on yet another unfunded mandate and administer it according to federal rules and on a federal time table.

The practical reasons are even more daunting. At this point any governor signing up to run a HIX is signing himself and his administration up for an unmitigated headache as the rules are nebulous, the costs open ended, and the potential to torque constituents when they confront Department of Motor Vehicle style customer service when trying to buy health insurance. Eventually the governor and the legislature will have to answer to the voters for that headache.

By refusing to participate, the governor can use the state insurance regulation power to take credit for good things and is free to use the HIX as a punching bag when his constituents complain. It is a win-win.

Thank You RedState and Streif