(photo: Campus progress/flickr)

The New York Times health care reporter, Robert Pear, has an article in today’s Times noting that Kathleen Sebelius, Secretary of Health and Human Services, is about to release guidelines for setting up the state health insurance exchanges called for in the Affordable Care Act (ACA). It’s interesting not merely for the degree of flexibility HHS plans to grant to states, but also for what it tells us about the total incoherence of the Tea-Republican position on a market concept they claim to support.

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.