Healthcare Exchanges: Who Should Run Them?

It was all over our local news this past week: Governor Jan Brewer came out with her decision to reject the federal government’s offer to establish a state-run healthcare exchange. Many were surprised by this decision, which appeared to be contrary to Republican ideology that is centered on smaller federal government and bigger local government. Others were greatly satisfied with her decision, such as the conservative advocacy group the Goldwater Institute, which has long held Brewer’s position.

While everyone has their own opinions about the Affordable Care Act, commonly referred to as Obamacare, I would like to avoid illustrating further bias here and instead lay out the arguments for and against a state-run healthcare exchange.

Argument #1: Who has control?

Those opposing state-run healthcare exchanges argue that state control is only an illusion. They believe that the federal government will maintain major oversight and limit the state’s ability to adapt the exchange for its unique patient population.

Obviously, those in favor of state-run exchanges believe that states really will control their programs. They believe that states will be able to design and develop their own unique programs and have a better handle on the health insurance market, which will ultimately drive down consumer prices and make healthcare more affordable and accessible for everyone.

Argument #2: Loopholes in the legislation

Many in opposition to the ACA are arguing that the actual legal document only offers tax credits and subsidies to state-run exchanges. This would leave the states with federal-run exchanges without extra help for their constituents to buy affordable insurance. However, this would also potentially create a loophole for states to then avoid the federal mandate that all employers with over 50 employees provide health insurance.

Advocates on the other side argue that while a literal interpretation of the document does appear to give benefits only to state-run exchanges, this was not the intention of those who drafted the legislation. Tax credits and subsidies are meant for everyone in the country to obtain more affordable health insurance. It is unclear if states will even be allowed to take up this kind of a lawsuit, and if anyone will really be up for trying to legally attack the ACA after its monumental upholding by the Supreme Court.

Argument #3: Who will pay?

Opponents of state-run exchanges, such as Governor Brewer, contend that states would have to pay for their own exchanges, while federal-run exchanges would be funded by the federal government. They argue, why would we want to pay for something that the government is forcing us to do and will have control over anyway?

Those in favor of state-run exchanges do not agree with this difference in funding sources. The federal government has already sent Arizona roughly $31 million in grants to assist in the planning of a possible state-run exchange. Furthermore, the federal government has promised to provide financial assistance to state-run exchanges until 2015. After that, states can be eligible for additional aid by meeting certain milestones regarding their exchange development.

These arguments present the tip of the iceberg in the fiery debate across our country right now regarding healthcare reform. The biggest questions in my mind at this point are: What will this mean for our patients? How will things be different in Arizona with a federal-run healthcare exchange? And how will this affect us as providers?

What do you think?

*You can refer to articles here, here, and here for the above information and more.