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Alaska wise to resist exchanges

Posted: April 17, 2012 - 12:02am

While constitutional scholars across the country pore over Supreme Court transcripts from last month’s oral arguments challenging the president’s health law, states like Alaska are faced with a decision: whether or not to voluntarily implement a key part of the law—a health insurance exchange—even though they oppose the law itself.

Though proponents characterize exchanges as little more than informational websites to provide consumers with information, in reality they represent new bureaucracies intended to facilitate a federal takeover of the health insurance market. A study in Illinois estimated the cost of operating an exchange to total $89 million annually in the state alone—hardly a bargain.

Alaska, both a party to the multistate lawsuit challenging the law, and the only state in the nation that refused to apply for federal grants to establish an exchange, had previously been a leader in resisting the unprecedented law, but now appears poised to consider implementation.

In January, Gov. Sean Parnell hired Public Consulting Group to study the state’s options for setting up an exchange—with the hope that the firm could help answer questions concerning the form and cost of operating an exchange in Alaska. A report from the group is expected soon.

But with a decision from the Supreme Court not expected until June, and numerous uncertainties surrounding exchanges, there are several reasons moving forward with an exchange might not be in the best interest of Alaska.

First, proponents of the law claim that the federal government will establish an exchange if the state doesn’t create its own. But they fail to mention that the law doesn’t provide Washington any money to set up a federal exchange, nor does it offer subsidies to people buying insurance through a federal exchange.

Second, there would be no difference between a state and federal exchange. Proponents of the law claim that a state-exchange will preserve flexibility. But any exchange, state or federal, would be under the control of Washington bureaucrats.

Third, spending taxpayer money implementing a law that could be ruled unconstitutional in a time of financial uncertainty isn’t prudent. Some states are considering taxes on health insurance premiums, doctors, and “sin taxes” to pay for their exchanges; others have considered cutting education, law enforcement, and other state programs to find the money. None of these options is right for Alaska.

Finally—and most importantly—setting up a state exchange means further entrenching the federal health law in Alaska. State officials who are serious about seeing the federal health law repealed or declared unconstitutional should stop hedging their bets by taking measures to implement a health exchange.

Alaska has been a leader among the states thus far in opposing the federal health law and refusing to implement its key provisions. As it now turns and considers implementation, the reasons for resisting an exchange in the first place should not be forgotten. Alaska was wise to resist exchanges last year, and the facts on the ground have not changed since.

• Herrera is a health policy expert and is director of the Health and Human Services Task Force at the American Legislative Exchange Council, the nation’s largest nonpartisan individual membership association of state legislators.

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