States are becoming increasingly hesitant about complying with the Patient Protection and Affordable Care Act (PPACA) by implementing a health insurance exchange. As a result, some are including sunset clauses in their health insurance exchange bills, in an attempt to avoid being “left behind.”
Sunset clauses are intended to reverse all or part of a legislative decision at a certain time or under specific criteria. States are considering sunset clauses as a way to roll back a health insurance exchange if the federal health care law is overturned by the U.S. Supreme Court or Congress. Those supporting this legislative tactic believe it will allow states hesitant to comply with federal health regulations to do so with a sense of security.
However, opponents argue states using sunset clauses are no more protected from the federal health care law than those that don’t. Even if the federal law is overturned, they noted, states will have established a new and elaborate government agency in their health insurance exchange. That agency will be extremely difficult to dismantle and will be able to lobby on its own behalf. It would have the authority to push for repeal of the sunset clause and to stay in operation.
A sunset clause acts only as “political cover,” making it appear a state does not agree with the federal health law while willingly choosing to implement it. States that truly oppose the law will refuse implementation of its health insurance exchanges.
The following documents offer additional information about health insurance exchanges.
The Minnesota Health Insurance Exchange Act—HF 497; Why Minnesotans Should Say No
The Citizen’s Council for Health Freedom argues Minnesota should not implement a health insurance exchange, offering arguments that apply to all states.
State Insurance Exchanges: The Case Against Implementation
Health Care News Managing Editor and Heartland Institute Research Fellow Benjamin Domenech gives several reasons states should avoid implementing a health insurance exchange. He writes, “Any exchange created to pass muster with HHS Secretary Kathleen Sebelius and the current rules within Obama’s law will be fundamentally flawed.”
Policy Tip Sheet—State Health Insurance Exchanges
Heartland Institute Health Care Legislative Specialist Kendall Antekeier outlines the arguments against state health insurance exchange implementation and provides facts about previously attempted exchanges. Antekeier writes, “If a state moves forward with implementing an exchange, it could invest valuable time and taxpayer dollars in developing a system only to discover it does not comply with final federal regulations.”
Should Virginia Create a Health Insurance Exchange
Michael Cannon of the Cato Institute explains why Virginia and other states should not craft an insurance exchange. Cannon notes, “Creating its own exchange will not allow Virginia to control its own health insurance markets. In the end, there is no such thing as a state exchange.”
Obamacare Exchange Scheme Could Destroy Insurance Marketplace
Health Care News reports how health insurance exchanges are expected to affect the insurance market: “In practice, they [health insurance exchanges] are delivery mechanisms for bureaucracy and could spur a public takeover of the health care system.”
Consumer Power Report: Don’t Go Exchanging
Health Care News Managing Editor and Heartland Institute Research Fellow Benjamin Domenech explains the “threat of an instituted ‘federal’ exchange—where a state presumably would have no input during the process—is a more hollow threat than ever before.”
Research & Commentary: Lessons from Massachusetts and Utah Insurance Exchanges
This Heartland Institute Research & Commentary outlines two states’ experiences with health insurance exchanges, finding they have not produced the desired results but instead increased state health care costs. Heartland Institute Senior Fellow Peter Ferrara is quoted explaining how the Massachusetts exchange increased costs by 42 percent in less than three years.
Research & Commentary: Exchange Regulation and State Implementation
Health Care News Managing Editor and Heartland Institute Research Fellow Benjamin Domenech outlines the exchange regulations distributed by the U.S. Department of Health and Human Services and discusses the risks for states in implementing exchanges.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Health Care News at http://heartland.org/issues/health-care, The Heartland Institute’s Web site at http://heartland.org, and PolicyBot, Heartland’s free online research database at www.policybot.org.
If you have any questions about this issue or the Heartland Web site, contact Heartland Institute Health Care Legislative Specialist Kendall Antekeier at [email protected] or 312/377-4000.