One should read that article in conjunction with an earlier Pear article describing the outright hostility of almost all Republican Governors and GOP dominated legislatures against any state effort to set up their own exchanges. That’s happening even though the Feds are granting states considerable flexibility and offering hundreds of millions to pay the state development costs. In this earlier article, Pear surveys the states and quotes governors and state legislators in opposition. There’s hardly anyone with an ideologically coherent statement consistent with the standard Republican or conservative view of how this is supposed to work, and many are simply afraid the Tea Party will object.
The Tea Party arguments against creating exchanges are that (1) exchanges are part of RomneyObamaCare and (2) the Supreme Court may find the whole thing unconstitutional. Neither argument makes sense.
As many others have noted, the entire concept of the exchanges is a Republican conservative idea that claims the correct way to manage health care costs is to use private insurance markets from which consumers can shop for price and coverage that suits their needs. Before Obama and Democrats supported this idea, Republicans wanted these market exchanges, arguing they would help consumers freely shop for what they wanted, and the competition would lead to more efficient outcomes. Economists say this is all doubtful when talking about the flawed health care and insurance “markets,” but let’s ignore that wee problem.
Boiled down to its essentials, an “exchange” is nothing more than a market place, a website today, with vendors going online. People go to the exchange website for convenience and information, because all the vendors are there in one place and because there is an implicit promise that the vendors will meet minimum standards for a market to function (e.g., no fraud, honest disclosure of the product and transparent pricing). The state may push standardization further to make sure consumers can actually compare apples with apples and not be misled by offers of oranges that are really prunes or empty bags. The more you can standardize the products, the more efficient the pricing should be, in theory.
This is elementary stuff for market advocates; but apparently, the Tea Party GOPers no longer believe any of it. And if they don’t believe that, there is nothing left of the Republican position.
Nor does their waiting for the lawsuits challenging the ACA make sense. While I doubt the Supreme Court will hold the individual mandate to be unconstitutional, I’m even more certain that it will not strike down the entire ACA on the grounds all the provisions are inseparable if the mandate is struck down. You can argue that you need a mandate to avoid free riders and to approach universal coverage, but it’s hard to argue that you need a mandate merely to have an exchange where customers can shop for and get information about private insurance.
In other words, if you believe that non-mandated markets for purchasing private insurance are the true conservative approach for health care, then it’s incoherent to oppose them merely because Romney and Obama agreed with you about exchanges. And it’s unreasonable to believe the Supremes will strike down the exchange provisions even if they don’t like the mandate.
I’m not sure what rationale the Tea-GOPers have left in their mindless incoherence, other than anti-Obama destruction for it’s own sake. If they get their way with a holding the mandate is unconstitutional, but the exchange provisions survive, conservative states will be left having blocked their own theories from being implemented, which their own ideology holds can only screw their own citizens.




13 Comments

they are unreasonable. tweeted and recommended with thanks
Isn’t incoherence the intellectual gold standard for the Tea Party?
This whole Kabuki is fucking BS to keep the Insurance companies and their owners leaching off the so called “Health Care System” and forcing all of us to pay through the nose till bled dry.
The only solution to bring “Heath Care” to everyone is to have a Single Payer System similar to the VA’s. Where everyone gets coverage and the vendors to the system Have to negotiate the price for their goods and services. That will cut costs and provide good care for all. Just my 2 cents..
Get profit out of Health Care.. It is killing people!!!
Great diary. Thanks Scarecrow. recc’d
I’m still wondering why Barack Obama and the mandarins of the Democratic Party were so slow to figure out that the Tea Party is dominated by Ayn Rand acolytes, racists, and conspiracy theorists, and thought they could do business with a political party dominated by that pack of jackals.
Because it helped them deliver for the 1%.
Scarecrow-
here is what the Health Insurance Company Bailout Law of 2010 has done so far:
1. Long term care act — dead because of politicians making up numbers, reality showed it to be insolvent
2. High Risk Pools- has missed its target and claimed enrollment by 90%, even after the federal government arbitrarily dropped prices by 50%
3. Eliminated child only policies in almost every state because of the restrictions placed on those policies, adding to the uninsured
4. Caused massive increases in rates, some of which are pre-emptive… even in ‘blue’ states like Connecticut where an emergency rate increase of over 40% had to be approved
5. A lack of even BLUE, DEMOCRAT states passing and implementing exchanges aggressively.
Nobody has shown that the costs (in Mass $32 million in admin costs alone for Romneycare exchange last year) will be manageable in even the short term for states…
States are actually acting rationally… both blue and red… the entire bill stinks…
And Obama just added $111 billion to the costs of the exchanges over through 2021… in just one year.
All states should sit back and wait and see…
You know who the largest ‘pushers’ of state HIE are? Blue Cross and Blue Shield Association…
All over the country, Democrat state legislators and the insurance industry are teaming up to push these bills so that more ‘graft’ can come to bailout insurers at our expense.
I haven’t read any followup to the exchange issues as of November. Few states had initiated action then, and there were problems with the legislation. According to a WSJ piece on Nov 16 (see link below) a serious new legal glitch had been uncovered in ACA.
Only 17 states had legislated to set up and run their own healthcare exchanges. For those states which do not, the Feds will do it for them. Those two situations are covered under two separate sections of ACA.
Under ACA, Federal premium assistance (tax credits and subsidies) can be offered only in exchanges which will be run by states (ACA Section 1311). They are not authorized in states with federally run exchanges (Section 1321). The apparent consequence is that a lot of ACA funding will be blocked in states containing federally run exchanges. Note: I haven’t looked up those sections, myself.
As a workaround the Administration is trying to get the IRS to issue a rule to treat both scenarios the same for tax credit purposes, instead of seeking an amendment to the law to allow such. So the Administration does perceive a problem.
Yet since there is no ambiguity or vagueness in ACA’s text in this regard, the problem remains that the IRS can’t rule to issue tax credits or spend where ACA clearly says it can’t. It wouldn’t be a case of the IRS clarifying something.
The following WSJ piece continues with an examination of likely scenarios, court challenges if such an IRS rule were put in place. It also points out that an IRS rule, even if it were to survive in court, would provoke untenable conflicts with the employer mandate in states hosting a federally run exchange. Also such a rule could be overturned by any subsequent administration without concurrence by Congress – whether or not that would be likely isn’t the main point in this dilemma. See
http://online.wsj.com/article/SB10001424052970203687504577006322431330662.html
The piece also indicates there were other defective items rushed through, which is not unusual in large legislation, with the intent of saving time and amending or using reconciliation later to fix. It’s a fine time-thrifty idea if the bill is not controversial and the same party controls the WH and both houses. Otherwise, maybe it’s not.
In short maybe at this point it’s just a bet. Perhaos the laggards are waiting to see what happens at SCOTUS.
If SCOTUS does throw out ACA in part or entirely, a state having set up an exchange may get buyer’s remorse and wish it hadn’t done so after all. . .
Sooooooo happy to be out of the health insurance racket.
I qualified for a new city program. Have no idea if it’s part of the ACA, but I’m getting as good — if not better — care than I did under my last nearly $800 a month private health insurance policy.
The high-risk pool in my state was unaffordable and with such a massive deduction that I would have been paying out money I didn’t have NOT to get health care.
Made more sense to pay out of pocket to actually get healthcare.
In the meantime, one of my friends died because she was uninsurable, and also couldn’t afford the high risk pool.
Thanks for the link. It will be interesting to see if the IRS can get away with that. If not then in states using the federal exchange there’ll be an individual mandate with no premium support credits, ouch.
Leaving aside that singular example of Max Baucus’s incompetence, a politician in a conservative state (of either party) would be foolhardy to support setting up a state exchange. 1. If the Fed’s will go ahead and do it anyway, why burn the political capital required to vote for it at the state level? 2 Since state legislatures are very often more corrupt than Congress, the federal program will almost certainly be better managed.
This shows the fallacy of Dems thinking that they can find “good solutions” from their “Republican friends” (Obama’s words). All that happens is the the old “conservative” positions now become the new “liberal” ones in the MSM.
Of course, that assumes that the Dems had honest intent to begin with, which I doubt. But the same thinking applies to progressives as a whole, and not just to this issue. Don’t ever shoot or shun your left wing, it is your left wing that stakes out the Overton Window “extreme” and if you eliminate that as a “reasonable” alternative from public discussion, then *you* become the “extreme”. The Right realizes this and this is why they never shoot their own right wing. In fact, they fear it.
-stewartm