Insurance “exchanges”: government-run insurance w/o a “public option”
January 12th, 2010 | by Brian Schwartz |The Wall Street Journal editorial board explains how so-called insurance exchanges of the House and Senate health care bills are government-run insurance:
Both bills [House and Senate] blow up the individual and small-business insurance markets, to be replaced with new “exchanges” in which people can buy heavily subsidized coverage and insurers will be told what rates they can charge consumers and what benefits they must cover. The Senate would create 50 exchanges and leave the regulation to state insurance commissioners, who would have to follow minimum (or rather, maximum) standards. The House prefers one national exchange and a new federal regulator called the Health Choices Administration.
The sole purpose of this office is to obliterate health choices: What really will be universal about “universal coverage” is that all consumers will have to buy essentially one standard product that Washington decides is best. Speaker Nancy Pelosi gave a flavor of what she expected of the new health choices commissioner when she said at a recent press conference that insurance companies “will be crying out for a public option.”
Read the whole article: The Health Choices Czar, The House and Senate debate how much to limit insurance flexibility.
Similarly, Scott Gottlieb, MD writes:
The plan before the Senate creates a set of 50 state-based insurance “exchanges” that are established as markets for health plans. Consumers must buy policies from their employers or through the exchanges — but, either way, their choice of coverage is limited to one of four basic insurance plans that the government sanctions.
tags: crowd out, direct purchase insurance, Health Choices Administration, health insurance exchanges, insurance as forced charity, Obama CarePrivate insurers will still compete to offer policies but must model their coverage on one of these four templates. In short, the Senate bill explicitly standardizes health benefits and then establishes elaborate mechanisms (including subsidies and penalties) to pay for them.
Here’s the rub: While these four plans vary from low- to high-cost options, the benefits offered under them are pretty much the same. The difference between the cheaper and pricier plans is mostly the amount of cost sharing (e.g., you pay less for insurance if your co-pays are higher).
In effect, the plan creates a single national health-insurance policy. Consumers’ only real option is to trade higher co-pays for lower premiums. But we’ll all get the same package of benefits established by a series of new agencies and an “insurance czar” seated in Washington.
Once the exchanges are in place, the individual market — the ability to go directly to an insurer and buy a health-care policy — will disappear. You’ll have only two places to buy insurance, in the exchanges or through your workplace.
