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Health Insurance Exchanges And The Federal Government

Posted Sep 16 2012 12:03pm

 Stanley Feld M.D., FACP, MACE

Health Insurance Exchanges are supposed to be state-regulated and standardized health care plans in the United States , from which individuals may purchase health insurance coverage eligible for federal subsidies.

All exchanges must be fully certified and operational by January 1, 2014 under federal law . [1]

The health insurance exchanges in all states are not going to be operational on time.

However, Americans of all income brackets are experiencing the increases in 20 hidden taxes in Obamacare right now. The increase in taxes is supposed to amount to $1.2 trillion dollars.

The health insurance exchanges, are supposedly one of the centerpieces of  President Obama ’s health care law ,

Their formation is failing despite President Obama’s publicity.

If they are created President Obama will have a clear path to the Democratic Party’s cherished Public Option.

This will be a giant step to achieving a single party payer healthcare system.

Unfortunately, the single party payer system will in turn fail because it will be unaffordable for America.

Individual states and the healthcare insurance industry will do everything they can to undermine the success of health insurance exchanges.

Federal officials never thought they would end up running the Health Insurance Exchanges. President Obama’s plan was to dump this formidable and complex task on the states. Half the states have refused to participate.

Obama administration officials are getting ready to set up and operate new  health insurance  markets in about half the states, where local officials appear unwilling or unable to do so.” 

“So far, Governors of 13 states with nearly one-third of the United States population have sent letters to the Obama administration saying they intend to set up exchanges. Complete applications are due on Nov. 16, 2013.”

In other words, 37 states have not signed up yet. Once those 13 states that have signed up and start calculating their costs for setting up and running the health insurance exchanges I suspect they will also withdraw.

The Secretary of Health and Human Services, Kathleen Sibelius ’ plan was to complete the regulations for the states to start the health insurance exchanges by January 1,2014. 

The Secretary of Health and Human Service has emphasized that states must meet her standards of transparency and accountability.

The federal government requires state exchanges to develop budgets and project operating costs, revenues and expenditures to the central government’s satisfaction.

States must explain how the revenue will be generated and how the exchange will address any financial deficits.

The federal government wants to set up the rules and require the states to execute these rules at the states expense. President Obama promised to “fund” the exchanges for the states for two years. After that they are on their own.

The health exchange programs will be delayed because the government pledged to set up the health exchanges in the states that opted out of the program. It has not started to set up these exchanges.

Creation of Health Insurance Exchanges is a complex and expensive task. States are required to operate under a balanced budget. States cannot balance their budgets with health insurance exchanges unless they further increase taxes.

 “Federal and state officials and health policy experts expect that the federal government will run the exchanges in about half of the 50 states.”

 My guess is it will be closer to 35 states. Federal officials are preparing to do the job. It will be poorly executed and difficult politically.

President Obama knows the public fears a federal takeover of the healthcare system. He realizes the public understands the health Insurance exchanges are one more step toward a federal takeover of the healthcare system.

The Obama administration does not want to encourage that fear by taking over the Health Insurance Exchanges.

Neither does the Obama administration want to alienate state officials whose help they need to execute the federally run healthcare exchanges.

The federal government does not have the manpower to run all these exchanges. It is outsourcing the work to private contractors.

We have seen the disastrous abuse to physicians by outsourcing fraud and abuse investigations to private contractors.

“The Obama administration has invited advertising agencies to devise an elaborate “outreach and education campaign” to publicize the federal exchanges and their potential benefits for consumers.”

The Federal officials are hiring private contractors to provide “in-person assistance” to consumers and to operate call centers.

President Obama’s administration has attacked Mitt Romney and Bain Capital for outsourcing of jobs.

President Obama is now outsourcing these jobs to a foreign company, while America desperately needs jobs here. This is duplicity to its highest degree.

He better keep it out of the mainstream media or Mitt Romney out to get it in the mainstream media somehow.

Federal officials have turned to the American subsidiary of a Canadian company, the CGI Group, to provide information technology services to the federal exchanges under a contract that could be worth $93.7 million over five years.

Kathleen Sibelius has demanded total transparency of state health insurance exchanges yet planning for the federal exchanges has been done almost entirely behind closed doors.

“We have gotten little bits of information here and there about how the federal exchange might operate,” said Linda J. Sheppard, a senior official at the Kansas Insurance Department.

“I was on a panel at Rockhurst University here, and I was asked, ‘Where is the Web site for the federal exchange?’ I chuckled. There really isn’t any federal exchange Web site.”

In New Hampshire, Thomas M. Harte, the president of Landmark Benefits, which arranges health insurance for 300 employers of all sizes, said:

“Nobody has any idea what the federal exchange will look like. There has not been much communication between officials drafting plans for the federal exchange and the people who will use it: consumers, employers, brokers and insurers.”

Administration officials have not set forth a budget for the federal exchanges.

“They said they intended to charge “user fees” to the participating health insurance plans.

It is unclear whether the fees are subject to approval by Congress or whether insurers could pass the costs on to consumers.”

The Federal Government is not telling us what they are going to do. It is not following its call for transparent regulations.

It is pretty clear to me this will be one of many steps toward the destruction of the healthcare system. The healthcare system will self implode. At that point everyone will be begging the government to take over.

It will be impossible for President Obama to take over a business the government cannot afford.

A key to Repairing the Healthcare System is to decrease the outsourcing and bureaucratic complexity.

It is to let Americans be independent, own their healthcare dollars and their health and not be dependent on government complexity, inefficiency and rationing of care.

Entitlements do not save money!

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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