Tuesday, October 04, 2011

EDITORIAL >> Insurance exchanges

The Arkansas Republican Party, or at least its legislative branch, declared that when the people’s best interests collide with the party’s, the party’s must prevail. Not in exactly those words, but that was the simple message in Republican legislators’ veto of state health-insurance exchanges.

Even the GOP’s reliable ally, the Arkansas State Chamber of Commerce, could not prevail on the lawmakers to give Arkansas businesses and individuals the advantage of buying from Arkansas-run exchanges rather than from the federal government’s. No, they said, you will buy insurance through Washington, not Little Rock, no matter if it is more expensive and troublesome.

There is an unmistakable element of childish spite in the Republican stance. Everyone knows that Republicans opposed the Patient Protection and Affordable Care Act of 2010, which they call “Obamacare.” That is fine. Lots of people don’t like insurance reform at all, many dislike certain features of the law and others would have achieved universal coverage some other way, perhaps by expanding Medicare and Medicaid to cover everyone.

But blocking the creation of insurance exchanges in Arkansas will have no effect on whether the law is implemented in Arkansas. Absolutely none. It is simple posturing, another chance to jab an unpopular president and link Arkansas Democrats to him. The GOP lawmakers hope that people won’t catch on that they are not protecting them from the insurance mandate but simply forcing them to go to Washington for insurance under whatever rules and at whatever premiums the federal bureaucrats determine are workable nationally.

The most controversial feature of the law is its requirement that people who do not have health insurance but can afford it with some government help buy a plan from one of the insurance companies or else pay a small penalty. Each state can set up an exchange where insurance companies would offer a range of group plans that are tailored to fit the requirement of the law and that state’s particular needs. If a state chooses not to set up an exchange, individuals and businesses in that state will buy plans from a national exchange.

Businesses pleaded with Gov. Beebe to request a federal grant before last week’s deadline to put together a state exchange. Beebe wanted to do it, but he told them that Republicans had blocked legislation to set up a state exchange in the regular legislative session and he was not going to defy them. Without some expression of bipartisan support he was not going to do it.

Randy Zook, the director of the State Chamber of Commerce, explained why he wanted his Republican friends to get over their pique and support the state exchange and why he was disappointed they repulsed him.

“We just think it would be better to have an exchange governed and managed by folks in Arkansas than be forced to deal with bureaucrats in Washington,” he said.

Rep. John Burris, the Republican leader of the Arkansas House, said the party considered setting up an exchange pointless until the U.S. Supreme Court rules on whether the Affordable Care Act is constitutional, likely next spring or summer. Never mind that when the court rules it will be too late under the law for Arkansas to start building its exchange.

Three appellate courts have ruled on the act. Two upheld its constitutionality and one upheld all of it except the mandate that people buy insurance or pay a penalty. The third court, in Georgia, ruled, 2 to 1, that the mandate exceeded Congress’ power under the Constitution’s commerce clause. That decision, by the way, was written by a judge whose daughter, a member of Congress, was a leading opponent of the Affordable Care Act. Some people would have recused.

Even if the Supreme Court upholds that court’s decision that the mandate is void, which court observers view as unlikely, the rest of the law will be implemented. That includes the exchanges. Businesses and people would still be able to buy insurance through the exchanges and would have a powerful incentive to do so: cheaper policies than are now available because everyone would be in a group plan much like the plans of large employers, and also government help with the premiums if your income is below 400 percent of the poverty line.

In Arkansas, the Republican Party wants you to deal solely with the hated federal government when that happens. We thought that was contrary to the party’s core philosophy. But let us hazard a guess. When it is all implemented in 2014, the Republican leadership will loudly lament that businesses and individuals have to deal with Washington bureaucrats rather than their friendly neighbors in Little Rock.