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Health care

Published March 14. 2011 05:00PM

U.S. District Judge Roger Vinson recently ruled that the federal health reform law was unconstitutional. Eventually, the Supreme Court will have to deliver the final verdict on the law.

Pennsylvania's citizens and their newly elected officials have maintained opposition to health care reform for some time. A majority of Keystone State voters favored repealing the measure in a Rasmussen poll taken just before the midterm elections.

Pennsylvania can help defeat this top-heavy federal takeover of its residents' access to health care. By refusing to establish the "health insurance exchanges" prescribed by the new law, Pennsylvania's leaders can avoid wasting state tax dollars doing the reform law's dirty work - and protect the health insurance choices of their constituents in the process.

The letter of the law prescribes states "flexibility" in structuring exchanges, and some believe that it is possible to design an exchange that increases consumer choice. Two states, Massachusetts and Utah, already have exchanges. Before health care reform, exchanges were suggested as a way to get around the major government failure in American health care: employers' congressionally-sanctioned monopoly control of our pre-tax health dollars, which limits our choices.

Knowing that many states, including Pennsylvania, will be under Republican single-party rule this year, certain business interests are making unlikely arguments in favor of the reform act's exchanges. These interests include IT vendors and consultants, health insurers who believe that they can dominate an exchange to the detriment of smaller competitors, and brokers who hope to get paid by the government to serve as navigators in the exchanges.

Some lobbyists claim that states can drop out of Medicaid and drive all of their former dependents into exchanges, where they will enjoy budget-busting federal tax credits. Even if this were possible, simply exploiting health care reform to transfer liabilities to the federal government hardly solves the national challenge of out-of-control health care spending. The perverse incentives resulting from such a "reform" would surely discourage Pennsylvania's politicians from rolling back the Affordable Care Act.

Appealing to conservative sentiments, lobbyists also warn that if states don't establish their own exchanges by January 2013, the federal government will do it for them. This is highly unlikely. This is highly unlikely. U.S. Secretary of Health & Human Services Kathleen Sebelius already has missed many deadlines prescribed by the legislation. In January, the new Congress likely will take away her checkbook, further diminishing her ability to roll out health care reform.

If advocates of repeal fail during the next two years, Sebelius will surely sweep away any "consumer-friendly" accommodations with a vengeance. Obama and Sebelius want to eliminate all private choice of health care in favor of a government monopoly. Once the exchanges are up and running, the administration will be able to impose whatever arbitrary regulations it wants.

Pennsylvania would also find that an exchange is very expensive to operate. Massachusetts's Commonwealth Connector spent more than $26 million on vendors and contractors in 2009 and $3.4 million on employee compensation. This makes up 3.5 percent of the money that businesses and enrollees paid into the exchange - on top of the bloated administrative costs that already exist in health insurance.

Any state establishing an exchange is making a one-way, lose-lose bet. If health care reform persists, exchanges will become bloated administrative nightmares. If it is defeated, states will have wasted time and energy that should have been directed towards that effort. The health care take-over is the president's problem. Pennsylvania's leaders shouldn't make it theirs, too

John R. Graham

Director of Health Care Studies

Pacific Research Institute.

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