Declining state health insurance exchange the only reasonable choice Brewer could make - Ahwatukee Foothills News: Opinion

Declining state health insurance exchange the only reasonable choice Brewer could make

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Posted: Friday, December 7, 2012 2:00 pm | Updated: 10:56 am, Tue May 21, 2013.

Nancy Pelosi once famously advised some questioners to not bother being too curious about Obamacare, then under discussion: “We have to pass the bill to find out what’s in it,” she told them.

As usual, the then-Speaker’s advice was self-serving at best. They passed it alright, but the more we “see what’s in it,” the more Obama’s flagship policy victory seems headed toward disaster.

Gov. Jan Brewer’s decision to decline a state run health insurance exchange wasn’t an act of partisan spite. It was the only reasonable decision she could have made under the circumstances. She emphasized the cost and the uncertainty of the incredibly complex rules still being written that we would be expected to enforce.

But we know enough about the insurance exchanges to know this would have been a horrible deal for Arizona. The exchanges are web-based marketplaces where federally approved insurance plans are matched up with buyers and where all applicable rules and subsidies are applied. Arizona isn’t required to operate an exchange. The feds may establish one now that we have passed.

Advocates for a state-based exchange claim that we could maintain local control over insurance policy. But that’s simply a myth. The law nobody read plainly states that “an Exchange may not establish rules that conflict with nor prevent the application of regulations” established by the secretary of Health and Human Services. That means the state would have been tasked with funneling patients and their premiums to insurance companies under federal rules while we picked up the tab. Why is anyone surprised that more than 20 states so far have turned down such a deal?

Big Health and the insurance companies may fume over seeing all their agreements with the Obama administration unravel, but there were even more disincentives for the state to sign on. Under a state-operated exchange, state businesses would have been subject to fines that a federally operated exchange won’t be allowed to assess. We would have been required to report to the IRS data on Arizonans who changed or terminated their insurance coverage and to share certain health information with the feds.

Gov. Brewer also had to consider that such an unwieldy, overcomplicated law will likely be a nightmare to administer. For example, take the simple matter of determining eligibility for the various subsidies. The exchange subsidies vary by family size and income. They may be different for different members of a single family. Yes there is no federal agency, let alone state, that can verify any family’s income.

The closest is the IRS, which (usually) knows by April 15 a family’s income for the previous year. Of course, that still leaves out the millions of Americans who don’t file with the IRS and creates a problem for those whose incomes vary from year-to-year. It’s a problem, but it doesn’t need to be our problem.

Actually, as Greg Scandlen points out in Townhall.com, almost everything in Obamacare was poorly thought out. The new insurance mandates are going pretty well, because the insurance companies decreed them. Even so, thousands of waivers from these requirements were issued to folks unhappy with the new higher premiums, primarily to constituents of high-ranking Democrats.

But remember the CLASS act, the much-anticipated provision to provide long-term care insurance? It’s gone, deep-sixed when the administration realized it was simply unaffordable. Or remember the 1099 provision, requiring businesses to issue a 1099 form to any vendor from whom they purchased $600 worth of goods. It left too when folks who really run businesses explained to those who never have that it was preposterous.

Highly touted federal risk pools have had few takers due to cost and complexity. Meanwhile, retiree health subsidies were quickly snapped up by unions and businesses who already pay for seniors and the money in that fund soon ran out.

Even the Medicaid expansions in the states, once the Supreme Court ruled they were voluntary, have lost their appeal. It looks like fewer than half of the states will sign on.

The last thing Arizona needed was to become a minion of the federal government in administering this unworkable and unpopular program. Better options based on consumer choice are out there once we dodge this bullet. Way to go, Gov.

 

• East Valley resident Tom Patterson (pattersontomc@cox.net) is a retired physician and former state senator.

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