Saturday, July 28, 2012

An Exchange by Any Other Name

is still an exchange. You can change the name, put some lipstick on that pig, but it is still a pig.

Health insurance exchanges are an integral part of Obamacare.    

So are taxpayer funded subsidies.

Without exchanges, there are no subsidies. More importantly, without the RIGHT KIND of exchange, there are no subsidies.

The Massachusetts exchange used for Romneycare relies heavily on taxpayer funding . . . especially from the federal tax coffers.

Much has been written about the Massachusetts Connector (the exchange) but very little about the exchange in Utah.

The Mass Connector has a staff of 45 employees and contractors and an annual budget of $40 million.

The Utah exchange has a staff of 2 and a budget of $750,000.

The Mass Connector relies heavily on salaried "navigators" and advertising to enroll citizens (and non-citizens) while the Utah connector incorporates and welcomes insurance broker participation.

According to The Economist:
Utah's reform is “market-based”, says Mr Herbert, whereas “Obamacare” is a big-government monstrosity. But it too relies on exchanges, so now the word is tainted.
Tainted by Obamacare.

So the folks in Utah want to hold a contest to rename their exchange.

But how is the Utah exchange is different from the Mess Connector and Obamacare?
Utah also decided that government subsidies should play no part in its reform, whereas the one in Massachusetts was based on them. Thus Mr Romney's plan became, more or less, the basis for Obamacare, whereas Utah started seeing its plan as a free-market alternative. 
Unsubsidized insurance. Instead, allowing the free market to determine price.

What a novel idea.
So the Utah Health Exchange is decidedly not Romneycare or Obamacare. But what is it? At first glimpse, it is a snazzy web portal where four of Utah's five largest health insurance companies offer about 140 plans to about 6,600 employees of 285 small businesses. Each employer determines in advance how much he will contribute to an employee's insurance, as in a defined-contribution pension plan. The employee then filters the plans and selects his favourite—again, as he might choose mutual funds in his defined-contribution pension plan.
Freedom of choice rather than a government mandated level of benefits. Agent participation. Market driven premiums. No mandate. No MLR (at least not at the state level).

How did they ever come up with that idea?

Granted, the Utah exchange doesn't have the participation like the Mess Connector but they also are spending very little of the taxpayer dollars to run the thing.

Does spending more money make it better or just make it more expensive?
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