Can Money Buy Affordable Health Care?
On January 17th, the Secretary of Health and Human sets proudly announced another $1.5 Billion in state insurance exchange formation grants to California, Delaware, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, New York, North Carolina, Oregon, and Vermont. The Affordable Care Act is definitely designed to “pay if you play.” These states are receiving the resources to research and develop their affordable insurance exchanges and create the vision of a market place where their residents will have access to quality, affordable health insurance.
Delaware, Iowa, Michigan, Minnesota, North Carolina, and Vermont received Level One Exchange formation Grants for one year to build their exchanges. California, Kentucky, Massachusetts, New York, and Oregon received multi-year Level Two Exchange formation Grants to implement their exchange plans.
Think of Level One Grants as the research and development funding and the Level Two Grants as the implementation funding. States are tasked with the development and implementation of the chief requirements a state insurance exchange must meet.
- Certifying, recertifying, and decertifying health plans offering coverage by the exchange by creating “Qualified Health Plans.”
- Assigning ratings to each plan offered by state insurance exchanges on the basis of quality and price.
- Providing consumer information on qualified health plans in a uniform format.
- Creating a calculator to give consumers the ability to estimate the cost of coverage after application of any tax credits or cost sharing reductions.
- function an internet website and toll-free telephone hotline offering comparative information on qualified health plans and the ability to apply for and buy coverage.
- calculating eligibility for the affordable exchange, tax credits and cost sharing reductions for private insurance, and other public health coverage programs, and assist with enrolling individuals in those programs.
- calculating exemption from requirements on individuals to carry health insurance, and granting approvals to individuals applying for hardship or other exemptions.
- Establishing a Navigator program to assist consumers in making choices about their healthcare options.
This course of action goes against everything I’ve learned in my 20 years of business experience. Successful business owners succeed by investing their dollars in proven business models, products, and sets. Manufacturers do not build 1,000 new products unless they have a tested working unit they call sell for a profit. Franchise organizations do not sell franchises until their business form has proven successful, and they have developed the infrastructure to sustain additional franchises. Angel investors will not fund business ventures that do not have substantial research and resources to allow their ventures to become successful. There is simply a greater chance of failure if you don’t go though the right course of action.
So why am I so concerned? Not one state has a functioning exchange form that has proven self sustaining. Based on my 20 years of business experience many will simply fail or require additional funding which will ultimately rule back to the taxpayer. Not only are we wasting billions in taxpayer dollars creating a vision for the administration, but we don’t already know if it will work.
Have we put the cart before the horse? Why don’t we have a proven exchange form to understand the operating costs? Why don’t we have all the insurance packages developed to understand premium costs? Why don’t we have an IT infrastructure that states can simply choose to use instead of developing their own? Why don’t we have research to understand the effects of multiple insurance carriers competing for business? These are just a few of the questions I ask myself over and over.
We are currently spending billions for states to research and implement their exchanges. Why haven’t we given them a functional form to start with? A well developed, proven, and customized exchange form could have been developed to allow states the freedom they need. We have taken a different path. Investing billions in a course of action that goes against everything business has taught us will consequence in failure and the American taxpayer will end up paying the price.