Obamacare is looking more and more like the utter failure that it is all the time.
People have discovered, contrary to the repeated promises of President Obama, that they can’t necessarily keep their preferred doctor or hospital. Many people are also at risk of losing their employer-sponsored health coverage later this year, and will be scrambling to find an adequate plan with participating doctors and hospitals.
A big part of the problem with Obamacare is the insurance exchanges, which offer limited choices, were hastily constructed, and are full of glitches, leaving taxpayers on the hook for the wasted money while people searching for health coverage are unable to find it.
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A report out of Illinois by a nonpartisan, free market based policy think tank, took a look at how the state-run exchanges were doing since the roll-out of Obamacare. It doesn’t look good for the states that choose to run their own exchanges instead of using the federal Healthcare.gov site.
Fourteen states plus the District of Columbia opted to establish a state-funded health insurance exchange. Of those 15 ObamaCare exchanges, eight are either being scrapped or are on the verge of collapse, with some states reverting back to the federal ObamaCare portal.
But the most interesting story is found in Rhode Island, which isn’t facing an inoperable website or insurmountable glitches. Rhode Island is now considering defaulting to the federal exchange on the basis of the administrative costs required to maintaining its exchange.
At an estimated cost of $23 million per year in administrative costs required to operate their site, some lawmakers in the state are finding that this may be too-large a burden – especially since using the federal portal, healthcare.gov imposes no additional costs on the state.
It should be noted that any money a state spends on running their exchange doesn’t go to actually helping anybody get coverage or care, but merely towards the administrative costs of running the exchange. When compared with the federal exchange that states can use for free, it becomes obvious that any money states spend on their exchange is money that could have been spent elsewhere.
In Illinois, previous estimates show that the state could spend over $100 million to operate its own site. The state is already facing a series of budgetary unknowns concerning implementation of the Affordable Care Act.
There is no upside for the state in adopting a state-funded ObamaCare exchange. Any supposed control or flexibility in operating its own exchange is lost through the numerous and onerous federal requirements. The downsides, as evidenced from experiences across the country, are clear.
All states should opt-out of the exchange system and let the federal government handle it, although that does create a problem of dumping even more people on an already broken and strained federal system. But, it is their creation and they should have to deal with it, problems and all.
States need to also opt-out of the other aspects of Obamacare, like Medicaid expansion. Sure, the feds will pay for the extra costs, at first, but in a few years those added expenses will be reverted back to the states, and state budgets likely won’t be able to handle the additional costs, especially when Medicaid already makes up a quarter of a state’s budget, on average.
We need a full repeal of Obamacare, and have it replaced by free market oriented, patient-centered reforms, with things like Health Savings accounts, portability of coverage from job to job, and the ability to shop for coverage across state lines, among other things.
Please share this on Facebook and Twitter if you aren’t surprised that state-run Obamacare exchanges are collapsing, just like the rest of the law.
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