FreedomWorks

“Central to the Commission’s strategy is establishing a national insurance exchange that offers a choice of private plans and a new public plan, with reforms to make coverage affordable, ensure access, and lower administrative costs."

- Commission on a High Performance Health System, February 19, 2009

National Insurance Exchange: A national exchange or gateway links individuals with health care plans that fit requirements set by politicians or bureaucrats under various proposals for greater government control over health care. Some politicians claim that a national exchange would assist those seeking insurance plans find a plan.

FreedomWorks Analysis: A national exchange would increase bureaucratic control and politicize health care choices, which would result in limits on a patient’s freedom to choose a health care plan that fits his or her personal needs and desires. When faced with the opportunity to exclude certain types of health insurance from the national exchange, politicians and bureaucrats would likely use their power to pressure providers into offering the type of care that government officials rather than consumers deemed worthy.

Those preferences will be driven by those with more lobbying clout, as they have been in deciding state insurance mandates, rather than what individuals want, as would be the case in a free market for health insurance. When thinking about the benefits of having a particular type of medicine, medical device, or type of therapy required by law to be included in an insurance plan in order to be included in the national exchange, it is easy to see why a company would invest heavily in lobbying for such inclusion.

Insurance companies would be compelled to find ways to satisfy their new quasi-regulators, instead of seeking plans that would satisfy their customers. A national insurance exchange would distort the incentives created in a free market for businesses to please their customers. We have seen already what state mandates and regulations can do to increase costs and reduce coverage. Massachusetts uses a “connector” similar to the proposed national exchange to filter consumers into various plans.

Rather than creating a national insurance exchange to filter insurance through bureaucrats to consumers, insurance companies should be free to offer their services across state lines and advertise the benefits of their plans freely to consumers.

Fmr. House Majority Leader and FreedomWorks Fdn. Chairman Dick Armey says:

“Just because the government doesn’t allow the invisible hand of the market to work in health insurance does not mean we should insert the visible boot of the government. Remove the barriers in the health insurance market, like the prohibition on selling across state lines, and the invisible hand will guide us at no cost to the taxpayer to health insurance like it does every day to food, clothing, and shelter.”

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