Exchange We Can Believe In?

Does the Health Care Compact Alliance opposed exchanges in which individuals and business can shop for health insurance? No! The compact says nothing about insurance exchanges. It simply leaves the decision of whether or not to set up an exchange with the state, not the federal government.

In fact, state insurance exchanges illustrate the benefits of the health care compact. Today, dozens of states, run by both Democratic and Republican governors and legislators, are setting up state-run insurance exchanges that are pioneering new methods for keeping health care costs down while improving quality of service. To use a phrase coined by President Obama, they have become "laboratories of innovation" for revolutionizing health care.

In a far-reaching survey of state health insurance exchanges, Pulitzer-Prize-winning journalist David Wessel, who writes on macroeconomics and the Federal Reserve for The Wall Street Journal, reveals why exchanges have become so popular for both red and blue states.

[They are] championed as a market-friendly alternative to government-run health insurance, one that would harness market forces to address one of the U.S.'s biggest economic challenges: rising health-care costs.

Two of the 13 states that have set up health insurance exchanges are run by Republican governors: Utah and Nevada. Out of the 33 states that have taken money from the federal government to set up insurance exchanges, 12 have Republican governors. Clearly, health insurance exchanges are not a one-party solution.

The way an exchange operates differs from state to state. Wessel points out some of the peculiarities:

Mississippi's [Gov.] Phil Bryant is building an exchange from an existing state agency. Arizona's [Gov.] Jan Brewer created a unit in her office to organize an exchange.... In Pennsylvania and Michigan, Republican governors who favor exchanges have been stymied by GOP legislators.

While the Health Care Compact Alliance opposes federally mandated insurance exchanges, the compact itself makes no mention of exchanges and would not prohibit them. Each state would be free to craft a solution that works for that state. That’s the whole point.

Source: "Health Exchanges Vex GOP," The Wall Street Journal, Capital column, May 10, 2012.
Image courtesy of Robin Hood Tax used under its Creative Commons license.

Steve O'Keefe is a freelance writer, author and book editor.