Montana should reject the president’s health care exchanges

January 23, 2013

Published in the Bozeman Daily Chronicle, April 27, 2012–On Friday, the Economic Affairs Interim Committee of the Montana Legislature will consider whether Montana should create a health care exchange, an integral part of the president’s new health care law. This exchange is being sold as a free-market tool for its simplicity, innovative design and ease of use, but these exchanges are nothing of the sort.
Health care exchanges voluntarily created by market participants could be something that conservatives support. However, the exchanges created by President Obama and his Department of Health and Human Services (HHS) must be opposed.

These health care exchanges heap thousands of pages of rules, regulations and mandates on Montana’s insurance market, hurting competition and increasing premiums for consumers.

Even Jonathan Gruber, an economist and chief architect of the law, acknowledges this fact. In a study for the state of Wisconsin, Gruber found that premiums for individuals will spike by 30 percent once the law’s requirements are in place.
Proponents argue that if Montana creates its own exchange it will have “flexibility” to meet the needs and wants of Montanans. But when HHS released the final rules governing the exchange in March they removed any hope of “flexibility.” HHS retains all meaningful control. In the 644-page rule, the word “must” appeared more than 1,000 times and “require” appeared more than 320 times. The rule is so specific that it dictates what items Montana must put on the exchange website. Montana’s plan must be sent to HHS for approval with the secretary having sole authority to determine compliance. Any attempt to create an alternative framework will be rejected.
The regulations also dictate which insurers can enter in the market, “qualified health plans,” and what products they must offer, “essential health benefits.” In fact, the federal government is now providing funding to create new insurers including the Montana Health Cooperative that received $58 million from HHS in February. HHS claims this non-profit insurer will protect consumers, but the two largest insurers in Montana are all ready non-profits. Why waste federal tax dollars to create something that already exists?
Additionally, time is running out to create an exchange. Plans must be submitted to HHS for approval by Jan. 1, 2013, less than 8 months away. Even if Montana wanted to create an exchange and become the bureaucratic arm of the federal government, doing so would be a herculean effort. Montana would need to create a vast bureaucracy with the ability to interface with Medicaid, the Internal Revenue Service and the Social Security Administration among others. The federal government isn’t even sure it has the capability or the funding to create an exchange. Montana should not do the heavy-lifting just because the federal government can’t.
Finally, this exchange is nothing more than a hidden tax increase on Montana residents and businesses. Starting in 2015, the exchange must be self-funding though no one knows the cost to operate the exchange. The cost is expected to be financed through user fees and taxes on insurance premiums further hurting families in Montana. More importantly, if Montana decides to create a state-based exchange, a glitch in the original law will subject Montana businesses to a new tax of up to $3,000 per employee enrolled through the exchange.
Some argue that Montana should wait for the Supreme Court’s ruling before deciding how to act. Regardless of the Supreme Court’s actions, Montana should oppose implementation of the president’s health care law. If the Supreme Court overturns the law, Montana’s actions will be validated and if the Supreme Court makes an error, it is even more important for Montana to resist the federal health care takeover.
Montana should join other states like Florida, Louisiana, Wisconsin and Kansas and reject the president’s health care exchanges.

Henry Kriegel is the grassroots coordinator for Americans for Prosperity-Montana, which tracks Montana’s health care exchange at

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