Beware the Power of ObamaCare Exchanges

The focus on health exchanges so far has been on the challenges administrators are having in creating the massive bureaucracy and infrastructure to deliver hundreds of billions of dollars in taxpayer subsidies. But once that is done, watch out.

An article by Brookings Institution economist Henry Aaron and Kevin Lucia, a board member of the Washington, D.C., health exchange, explains that once they are up and running, the power these exchanges will have will be “enormous.”

Their article in the New England Journal of Medicine is appropriately entitled “Only the Beginning — What’s Next at the Health Insurance Exchanges?”

“Mundane administrative tasks will occupy the exchanges for the first year or two,” the authors say. “But the exchanges are an instrument of enormous potential power.”

They outline “the future” of exchanges with this expanded power. For example:

1) States may bar the sale of insurance to individuals and small businesses outside the exchanges, as Vermont and Washington, D.C. already have done, or require that the same plans be sold inside and outside the exchanges

2) Exchanges could advertise information on the quantity, quality, and prices charged by hospitals, doctors, and other providers and bar plans that do not meet their standards.

3) States can require plans to offer incentives for people to use high-quality, low-cost health care services and providers. They also could require providers to apply research findings from analyses of “comparative effectiveness”

We should all be very, very concerned. The exchanges, whether created by the states or by the federal government, are the bases for further centralizing control over our health sector, with hugely consequential decisions being made by unelected bureaucrats. They are the foothold for a government-run health-care system and are much more than benign “marketplaces,” as the Obama administration claims.

Posted on National Review Online September 9, 2013

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