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Tuesday, May 21, 2013
Navigating the ObamaCare Maze
By NCPA @ 1:28 PM :: 3331 Views :: Health Care

Navigating the ObamaCare Maze

NCPA May 21, 2013

On October 1, millions of Americans are supposed to be able to go online and acquire health insurance on electronic exchanges in the states where they live. But here is a question that is being increasingly asked by people in the insurance industry: What happens if the exchanges aren't ready on time, says John C. Goodman, president and CEO of the National Center for Policy Analysis.

  • The only states that have functioning exchanges at the moment are Massachusetts and Utah.
  • Both developed their exchanges independently of the Affordable Care Act, and they may not be able to do everything the federal government requires.
  • Fifteen other states are trying to develop their own exchanges with varying degrees of success.
  • The other 33 states have either completely ceded responsibility to the federal government or have entered a partnership that gives the federal government responsibility.

One problem is that too little money was budgeted for creating the exchanges.

  • The Congressional Budget Office originally estimated that setting up the exchanges would cost between $5 billion and $10 billion.
  • California alone is spending more than $900 million, yet the health reform law allocated only $1 billion for the country as a whole.
  • The Obama administration has been cannibalizing other federal health budgets in a mad rush to find more for the exchanges.

A second problem is complexity.

  • The Obama administration wants something the federal government has never done: a computer system that connects Health and Human Services, the Internal Revenue Service, the Social Security Administration, Homeland Security and perhaps other departments.
  • This is a herculean task with unclear benefits.
  • Meanwhile, has anyone asked why we need to link all these agencies in order to operate an exchange?

A third and much bigger problem is competency. The federal government is probably the worst entity possible to design an exchange. One of the worst mistakes the federal government makes is the tendency to try to reinvent systems the private sector has already invented. The government has been true to form under the health reform law, completely ignoring private exchanges that are up and running.

Source: John C. Goodman, "Navigating the ObamaCare Maze," Wall Street Journal, May 19, 2013.

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