A Michigan House subcommittee voted down a bill that would create a state-run health insurance exchange on Nov. 29. With a Dec. 14 compliance deadline quickly approaching, Gov. Rick Snyder will be forced to give up hopes of a bipartisan agreement on a state-run exchange and instead allow partial federal control of the state’s health insurance exchange which is part of President Barack Obama’s healthcare reform, the Affordable Care Act. Though the Michigan legislature — and the legislatures of other states — may not agree with the Affordable Care Act, politics shouldn’t come before practicality as the state proceeds. The insurance exchange provides citizens with detailed knowledge of health care offerings and fosters an environment of competition between insurance providers.
The exchange will provide Michigan residents with an aggregated source of information for comparing the offerings of insurance companies, as well as giving residents the means to shop for their health care plans online in a single location. The stipulations set by the healthcare law not only give states the opportunity to propose their own insurance exchange programs, but also establishes a forum in which consumers can easily compare all available insurance options. Though Republicans have traditionally argued in favor of state rights, their opposition to the state-run health care exchange undermined their own goals, forcing Snyder to allow federal intervention. Furthermore, state Republicans have also belied their alleged support of “free market principles,” since the insurance exchanges create competitive marketplaces.
Granted, the state-run exchanges are inextricably linked to the Affordable Care Act, which Republicans oppose on the grounds that it places government strictures on a private health care enterprise. However, recent reports by the Department of Health and Human Services show that more than a third of Americans could be denied coverage based on pre-existing conditions without the expansive action of the ACA. Previous opposition to federal control of health care asserted that government insurance mandates could worsen adverse selection, whereby young, low-risk individuals abstain from buying insurance until they get sick, consequently increasing costs for the entire insurance pool. But the ACA’s verdict to require all eligible individuals to purchase an insurance plan mitigates this problem by including all Americans in the risk pool. It’s a practical way to allow private insurers to remain financially productive without denying coverage to millions of Americans who need it.
Before the presidential election, state Republicans justified their opposition to insurance exchanges with statements such as the claim from State Rep. Chuck Moss (R-Birmingham) that the law was “iffy in the courts and possibly going to be repudiated in the next election.” Going forward, the debate regarding state implementation of insurance exchanges should operate independently of legislative opposition. The exchanges are the most diplomatic way to afford fair and equal coverage to Michigan residents and should be unilaterally supported.