How Massachusetts’ Commonwealth Connector is Better than Utah’s Health Exchange
The range of current libertarian-conservative expert opinion on ObamaCare’s Health Benefits Exchanges has well-defined boundaries. On the one hand, there are those who believe that states are obliged to establish some sort of barebones exchange along the lines of the Utah Health Exchange in order to prevent the federal government from coming into a state and imposing a bloated contraption like Massachusetts’ Commonwealth Connector. Others (especially myself) believe that the Utah Health Exchange is unimpressive, that no “exchange” can overcome certain bureaucratic necessities, and that states should therefore refuse to collaborate with ObamaCare, while waiting for it to be overturned by the Supreme Court or a future Congress and President. (The Cato Institute’s Michael Cannon has also arrived at this conclusion.)
None of us has anything positive to say about Massachusetts’ Commonwealth Connector — until now! In one respect, the Commonwealth Connector is an extremely well-run government program, while the Utah Health Exchange is not. The issue is transparency.
Soon after I started writing critically about the Utah Health Exchange, I received e-mails and phone calls from a businessperson with a financial interest in the success of that enterprise, scolding me for using information was out of date. The new Utah Health Exchange, re-launched in 2011, is going gangbusters, according to a phone conversation that this businessperson had recently held with the exchange’s boss.
Sorry: Not good enough. The Utah Health Exchange has never published an annual report, and its last press release was dated April 28, 2010! Massachusetts’ Commonwealth Connector, on the other hand, published a thorough report on the effect of the mandate last December, and its mandated annual report to the legislature the month before that. It also publishes its schedule of board meetings, alongside the agenda of each meeting and the minutes of previous meetings.
Massachusetts’ Commonwealth Connector is an expensive and unnecessary bureaucracy, but at least it’s upfront about what it’s doing. Even its critics should congratulate its transparency. Advocates of the Utah Health Exchange, on the other hand, evangelize from a data-free zone of wishful thinking. Those who believe that Utah has shown how to run a health benefits exchange should demand that the state provide data to support such a conclusion.
So what about Gov. Mitch Daniels’s Healthy Indiana Plan? The Galen Institute says:
Cato’s Michael Cannon is misguided in his criticism of HIP. “It could not be more different [sic] than the government-controlled entitlement programs created by President Obama and former Massachusetts governor Mitt Romney. It is especially odd that Cannon would criticize HIP, since it is built on the foundation of health savings accounts, which Cato has championed for more than two decades.”
Great post John. This could also be discussed in context of one of your previous posts on market failures. In the public sector one reason for government intervention in the market is when a large informational asymmetry occurs. When this happens the administrating body can take advantage of the recipient due to lack of information exchanged (either intentionally or unintentionally). Without transparency on how the exchange is performing, citizens can become inelastic price takers with no substitutes. How is government intervention supposed to correct a market failure (if there is one) when it cannot address or provided one of the major reasons for it stepping in?
The best Health Insurance Exchange is eHealthInsurance.com. But eHealthInsurance.com cannot easily overcome the problem of disincentives to purchase individual insurance and the 50-state patchwork of regulations.
Okay I get it.
Deomcratic “Obamacare” bad.
Republican presidential hopeful “Romneycare” and “Danielscare” good.
But don’t look at the republican “Herbertcare” in Utah it’s bad; and he’s not running anyway.
What about “Brewercare” in Arizona. They have death panels.
John, transparency doesn’t make a bad idea any good. Your title should have said “Nothhng is better than any exchange: transparency doesn’t count.”
Bob