The Utah Health Exchange: A Retort to the Rebuttal

Professor Norman Thurston of the Utah Department of Health has decided to rebut my criticism of the Utah Health Exchange.  His article is posted at Forbes.com: The Apothecary.

Prof. Thurston repeatedly charges that I mischaracterize the Utah Health Exchange (UHE) and present false information.

Why Don't Health Exchanges Work?

A previous entry reported and discussed the lackluster — basically non-existent — results of the Utah Health Exchange, and promised to explain why unsubsidized exchanges are unlikely to attract significant numbers of beneficiaries from the small-group market. The answer, I believe, is pretty straightforward: The administrative costs of operating an exchange plus the administrative costs to a small business of migrating to the exchange are almost certainly greater than the administrative costs of participating in the traditional small-group market (or taking account of other “work arounds” promoted by some insurance producers). Therefore, unless an exchange is subsidized from non-exchange sources (as per Obamacare), it will not attract many participants.

While straightforward, this conclusion is not necessarily intuitive.

Read the entire column (and comments) at John Goodman's Health Policy Blog.

Why the Utah Health Exchange is No Model for Health Reform

The Utah Health Exchange is the model some conservatives believe can be used to push back against Obamacare. Witness the Wall Street Journal (July 16) soundly rejecting regulatory guidance on what the Administration is now calling "Affordable Insurance Exchanges," but encouraging governors to get on the exchange bandwagon, in the hope they can build free-market exchanges that will blunt Obamacare's worst effects.

How Massachusetts' Commonwealth Connector is Better Than Utah's Health Exchange

The range of current libertarian-conservative expert opinion on ObamaCare’s Health Benefits Exchanges has well-defined boundaries. On the one hand, there are those who believe that states are obliged to establish some sort of barebones exchange along the lines of the Utah Health Exchange in order to prevent the federal government from coming into a state and imposing a bloated contraption like Massachusetts’ Commonwealth Connector. (For an example of this approach, see here.) Others (especially myself) believe that the Utah Health Exchange is unimpressive, that no “exchange” can overcome certain bureaucratic necessities, and that states should therefore refuse to collaborate with ObamaCare, while waiting for it to be overturned by the Supreme Court or a future Congress and President. (The Cato Institute’s Michael Cannon has also arrived at this conclusion.)

None of us has anything positive to say about Massachusetts’ Commonwealth Connector — until now! In one respect, the Commonwealth Connector is an extremely well-run government program, while the Utah Health Exchange is not. The issue is transparency.

Obamacare Will Destroy Utah's Health Exchange

Back in a November 2009, Utah governor Gary Herbert complained in remarks at the Heritage Foundation that the federal government was “freezing out the states” on health-care reform.

How have things gone since then? According to the governor’s remarks (as reported by Jane Norman of CQ HealthBeat) when he returned to the Heritage Foundation last week, “Utah officials waited for eight months to find out if the state would be allowed to use e-mail rather than paper to communicate with Medicaid recipients and save $6 million a year.” Herbert concluded — with bemusement – that “they sent us a denial by e-mail.”

Should Your State Establish An ObamaCare Health Insurance "Exchange"?

In a few words: Amost certainly not.  It will cost tens of millions of dollars to operate for no benefit whatsoever.  And states with the best intentions will be led astray by Secretary Sebelius and her ObamaCrats.

ObamaCare is President Obama's problem: Don't make it your state's.  This month's Health Policy Prescription.