Republicans at the General Assembly are falling prey to the fallacy of the false alternative. The federal Patient Protection and Affordable Care Act — Obamacare — requires states to establish health-insurance exchanges where consumers could shop for insurance the way Expedia lets you shop for travel deals. If some states decline to do so, then the federal government will step in and create an exchange for them.
Certain members of the legislature think this means Virginia has a choice between an exchange controlled by Washington and one controlled by Virginia. But that is not the case.
The Department of Health and Human Services has imposed a variety of requirements any exchange will have to meet. For starters, an exchange must set a package of “essential benefits” that is far from minimal. The federal benchmark is the coverage offered by one of the three largest insurers in the state. States could add to that package (“plans could modify coverage”") but could not subtract from it (“so long as they do not reduce the value”). Moreover, any plan in the exchange must cover “items and services in at least 10 categories of care.”
In short: An Obamacare exchange will offer less choice, not more. Consumers who want to buy affordable plans for catastrophic care would not be able to. Health savings accounts probably would be verboten. Like Henry Ford, who said customers could have any color car so long as it was black, Obamacare says state exchanges can offer any plan, so long as it is gold-plated.
What happens if a state allows a wide variety of plans at different prices and coverage levels? Washington would declare that it allows too much choice — and take over.
So here are the real options facing Virginia: (a) federal bureaucrats determine the form of our exchange, or (b) federal bureaucrats determine the form of our exchange. There is no (c).
Some big insurance companies are perfectly fine with this. They find it pleasing for the same reason Altria finds the Food and Drug Administration’s regulation of tobacco pleasing. It would lock in their market share, protecting them from competition.
Running a health-insurance exchange would cost a lot of money — money Virginia does not have. Since Washington will dictate how it will be run, Washington should pick up the tab.
Adapted from the Richmond Times-Dispatch
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