Missouri May Put Exchange Implementation on Ballot

Published March 1, 2012

Missouri’s Senate recently decided to send implementation of the health insurance exchange program mandated by President Obama’s health care law to the voters, taking the first step toward turning the exchange into a ballot issue which could be sent to the voters in November.

Democratic Gov. Jay Nixon supports implementation, but the Republican-led legislative branch has pushed back against the implementation of this key element of the president’s health care agenda, which would create a government-run marketplace for purchasing insurance.

Senate Bill 464 prohibits the establishment of an exchange in the state via executive order, requiring either approval from the General Assembly or at the ballot box. Missouri’s Senate passed the bill by a 25-8 vote—it must now pass the House before going to voters.

This would not be the first ballot issue in the state to reject a mandate from the federal government. In 2010 Missouri voted overwhelmingly in favor of Proposition C, which prohibited any mandatory purchase of insurance. If Missouri voters supported an exchange, officials would be required to implement a state-produced program by 2014 or turn over control to the federal government.

Exchange Viewed as Unconstitutional

Sen. Rob Schaaf (R-St. Joseph) has been an outspoken critic of exchange implementation, assaying a federally run insurance program would be unconstitutional.

“We have separation of powers in our governments, and the legislative branch is the policy-making branch, not the executive branch,” Schaaf said. “Making a health insurance exchange is a huge alteration in the fabric of our society, and it needs to be done by the legislative, not the executive, branch.”

“Our system is so perverse and corrupt without competition. The marketplace protects existing competitors, and there is no downward pressure on prices,” Schaaf said.

Local Implementation vs. Federal

Karen Edison, director of the Missouri Center for Health Policy, says a state-run exchange would be better for Missouri than a federally mandated one.

“I think health care works better when policy decisions are made on a local basis,” said Edison. “I think it would be preferable for Missouri to have its own health insurance exchange. However, that process has been stalled in this state—there are some folks who have philosophical objections to the federal government having more control in a regulatory way over the health insurance market.

“If our own state does not set up our own exchange, we will have much less control over the structure,” Edison said.

But John Graham, director of health care studies at the Pacific Research Institute, says the federal government in fact has the final say on every significant aspect of how the exchanges run. He maintains exchange implementation would sacrifice Missouri’s sovereignty and leave the state responsible for the long-term costs.

“The few million dollars from the federal government allotted to each state for exchange implementation are a pittance, certainly not worth selling your state’s sovereignty for,” Graham said. “It would be better for these funds to be given back to the people, instead of funding a new government bureaucracy.”

Little Upside to Implementation

Schaaf says he does not see any upside to the implementation of exchanges for individuals or the state.

“I suspect the cost of running an exchange will be a financial drain, and in my experience when government tries to meddle with the free market it just ends up making things worse,” Schaaf said. “They need to put competition back into health care by making the purchase and delivery of health care totally transparent. People need to know how much they are paying before they buy. They need to have some stake in the cost, and they need to make choices on the basis of costs. All the various roadblocks to competition need to be removed. When those things happen, the price of health care will go down significantly.”

Graham says Obama’s law has already proven to be flawed and politically toxic, and Missouri should do nothing to apply it at the state level.

“Obamacare is Obama’s problem,” Graham said. “Missouri should not make it a state problem.”