The inefficiency of the federal exchange created as part of the implementation of the Affordable Care Act has shed light on a rarely discussed issue: the U.S. government and state governments insistence in over-regulating healthcare.
This is a problem that has been keeping Americans from having access to quality and affordable health care since the 1950s when states began interfering with the industry by deciding what and how insurance companies should offer their services.
Through the 1960s, insurers ended up being obliged by law to offer coverage to a wider array of people, causing an increase in price of services that has been felt across the board. By the 1970s, more healthcare workers were added to the mix. By the 1990s, healthcare laws were forcing insurers to follow requirements regarding every single type of coverage they offered.
The chokehold around insurers’ neck may have prompted its industry to push for lobbying that would make their work easier since so many regulations have been increasing the price of care to everybody, keeping a greater number of Americans uninsured. What insurers may have not expected, however, was that the law they worked so hard to pass would end up being implemented… as written.
According to Reason’s Peter Suderman, Obamacare could represent yet another challenge to insurers across the country due to its arbitrary text.
“(…) Americans are generally required to buy the product you sell, they are heavily subsidized by the federal government, and if your expenses for exchange-based plans come in more than a bit higher than expected, the federal government will cover a significant percentage of your overage.
All in all, you’ve got a fairly generous setup. But you probably have some worries. For instance, what about those lawsuits contending that, because the text of Obamacare only allows subsidies in state-established exchanges, only state-established exchanges should be allowed to disburse subsidies? Imagine what would happen if those crazy legal challenges were actually successful. That might be a problem for insurers, given that the majority of exchanges were established by the federal government, not states.”
One would think that after so much lobbying, the government would have gotten things right this time… how about that!
Photo: "This is what change looks like: passing health care reform." http://www.whitehouse.gov/photos-and-video/photogallery/fight-health-reform