Why ObamaCare health insurance exchanges won’t work

A new paper published by the Galen Institute warns that states which fall into lockstep with ObamaCare’s health insurance exchanges will end up in a bureaucratic morass with exchanges that won’t work, won’t increase access to affordable health care, and won’t improve health outcomes or increase value.

Rita E. Numerof, Ph.D., writes in “What’s Wrong with Health Insurance Exchanges…” that the solution to affordable coverage won’t be found in cookie-cutter compliance with ObamaCare’s bureaucracies, but rather in removing regulations that make coverage unaffordable today and in reducing barriers to competition and consumer choice.

“Rather than focusing on compliance with PPACA, legislators should take inventory of the problems plaguing the health insurance markets in their states. Then they can confront the most critical issues of insurance coverage, care delivery, and payment reform to ensure that residents have access to affordable care and enjoy better health outcomes at lower cost,” Numerof concludes.

If the Supreme Court declares the health law unconstitutional, the ObamaCare exchanges will be void.  But that will not obviate the need for states to tackle the very real problems that drive out competition and drive up the costs of health coverage.

Some states already have started the process of studying the changes needed in their individual and small group health insurance markets, and some also have begun putting in place the cornerstones for web portals and marketplaces to help consumers select from a range of health insurance choices.  They are working to reduce barriers to competition and consumer choice and untangle the bureaucracy and regulations that make coverage unaffordable today.

Many states also are working to inoculate themselves against the threat that the federal government would swoop in to create exchanges if they don’t take action on their own. These states are assessing their own needs and resources and not allowing the federal government to dictate how they proceed.

States will play a major role in the next phase of health reform.  Those states that are working now on assessing their own challenges and resources will be better prepared to take the lead in the future.

Dr. Numerof is co-founder and president of Numerof & Associates, Inc., a strategic management consulting firm.  The Galen Institute is a non-profit research organization based in Alexandria, VA, that focuses on free-market ideas for health reform.