On Health Exchanges, Much Ado About Something That’s Not Needed
In Minnesota, where liberal Governor Mark Dayton has insisted that the state will implement an Obamacare health exchange (other states like North Dakota have, wisely, opted out), there is a battle being fought over what the exchange will look like.
Originally the exchange was to be hosted by the state’s Department of Commerce which also regulates insurance, but that is changing after concerns over a conflict of interest within a state agency that both provides and regulates insurance. Other interests have also complained about a lack of transparency from Commerce about the proposed exchange:
The groups — including the Minnesota Chamber of Commerce and the Agents Coalition for Health Care Reform — said Commerce Commissioner Mike Rothman had withheld key details about the exchange.
“We’re obviously having a little disagreement with the commissioner, but, again, it’s not that we think he’s doing anything necessarily wrong,” Chamber of Commerce President David Olson recently told MinnPost. “We just don’t know. That’s the frustration. We have no idea what this thing is going to look like.”
Throughout the article the exchange is compared to private sector travel deal aggregators like Orbitz and Travelocity. That’s an interesting comparison, because both Orbitz and Travelocity are entirely manifestations of the free market travel/vacation industry. There was no need for a law mandating the existence of those websites. They rose to meet consumer demand.
So why the need for government-created exchanges in health insurance? After all, health insurance is even more in demand by Americans than travel deal.
It speaks to the fact that health insurance is anything but a free market. Most Americans, well over 80%, do not buy their health insurance. They get it through an employer or another third party, a situation for which there’s a de facto subsidy in that premium payments are deducted pre-tax, lowering taxable incomes. There are also a myriad of other restrictions on health insurance, such as a ban on selling policies across state lines among other things.
The point being that the government doesn’t need to set up exchanges to promote “shopping around” for health insurance. What the government needs to do to promote that is to get out of the health insurance consumer’s way.
Which is the exact opposite of what Obamacare does.Tags: health care exchanges, mark dayton, minnesota, obamacare