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Should the States Set Up ObamaCare Exchanges?

Under the Patient Protection and Affordable Care Act (PPACA), state governments are expected to set up health insurance exchanges through which individuals will buy their own health insurance, in many cases with substantial subsidies. Should the states comply?

In the following point-counterpoint discussion, Linda Gorman and I give opposing answers to this important question. Leave your thoughts in the comments.

John Goodman: Yes

If the states abdicate their responsibilities under PPACA, the federal government will step in and act in lieu of the state. Under this scenario, states will relinquish all power to make a bad law better. Letting the federal government implement reform almost guarantees bad outcomes.

Linda Gorman: No

Exchanges are required to perform a variety of duties beyond distributing ObamaCare subsidies, and these duties are likely to add significantly to estimated costs. Some of them will damage a state’s business climate by creating new opportunities for crony capitalism. Some require that currently fashionable, but poorly tested, models be forced on health care providers. Some require that state exchanges have expertise equal to private insurers. Others force states to increase the cost of health insurance for people who currently have coverage.

John Goodman continued:

The states should engage in preemptive reform over the next two years. This means enacting responsible, rational reforms — the kind of reforms that they should have enacted all along, in the absence of federal legislation. Where possible, states should try to make their reforms compatible with the new federal law — but only if compatibility does not sacrifice the major goals of the state’s reform.

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