Rep. Joe Pitts
It has been nearly 1,000 days since President Obama signed his health care bill into law. With the Supreme Court upholding much of the law earlier this year and the political situation in Washington staying the same following the election, the administration will have free reign to implement the President’s vision for health care.
I vigorously opposed the bill because I believed it would fail to deal with our biggest health care problem: rising costs. Indeed, the Congressional Budget Office could not back up the President’s claims that the bill would make health care less expensive in the foreseeable future. For many people, their premium is already going up.
Last week, the Associated Press reported that insurers will be charging a new $63 fee in the coming year. When Obamacare was being considered this was just one of the many fees and charges hidden from consumers. Taxes will be assessed on insurers, medical device manufacturers and pharmaceutical companies but the real people footing the bill will be patients.
The taxes are all set to be collected, but Obamacare’s benefits aren’t quite ready for primetime yet. The centerpiece of the law is the establishment of health care exchanges in the 50 states. Exchanges could be a good idea, if they were truly an easy way for insurers to offer plans and for consumers to have real choices.
The law gives states a choice about whether to create and operate the insurance exchange within their borders. States can also choose to “partner” with the federal government to create an exchange or leave the responsibility completely up to Washington.
Republicans are typically the party that promotes federalism, so it may be initially confusing to find that many Republican governors have decided to let the federal government run the exchange in their state. In fact, this week Governor Tom Corbett announced that Pennsylvania would elect not to create a state-based exchange.
There are some fundamental problems that make it unwise for a state to create one of these exchanges on behalf of the federal government. First of all, the rules aren’t actually written yet. The Department of Health and Human Services avoided putting out any detailed regulations governing state-based exchanges until after the election.
Throughout this year, governors and other state officials from both parties and from across the country wrote detailed letters to Health and Human Services Secretary Sebelius asking for information. Energy and Commerce Committee Chairman Fred Upton (R-MI) and I also wrote the Secretary asking her to reply promptly. Some letters elicited no response and others were barely acknowledged. Important questions remain unanswered.
Secondly, even now, the guidance from HHS is not enough for states to determine how much it would cost to set up an exchange. These insurance marketplaces have to be up and running by September 30, 2013. With the rules still largely undefined, states would be starting a race without knowing what the track looks like or whether they have enough gasoline to get across the finish line.
Finally, even with the little guidance that is out there it is evident that states will not be in the driver seat. How these exchanges will be structured will be determined almost completely by bureaucrats in Washington.
At this time, only 14 states have elected to run their own exchange. Twenty-four states have decided to leave it up to the federal government. It makes perfect sense. The “choices” states will be able to make in setting up an exchange are largely illusory.
Because the federal government hasn’t been doing their job in providing guidance, states are reluctant to help share the burden. HHS did not anticipate running so many exchanges in so many states. The President’s health plan simply won’t work without these marketplaces. They will be the only way for individuals to reliably purchase insurance that meets government requirements and avoid new tax penalties. The clock is ticking, and there is no telling whether Obamacare will be ready.
U.S. Rep. Joe Pitts is a Republican who represents Pennsylvania’s 16th Congressional District in portions of Berks, Chester and Lancaster counties.