Obamacare’s Insurance Exchanges: “Private Coverage” in Name Only
The declared purposes—and resulting effects—of the Obamacare exchanges are very different from those of consumer-oriented approaches. Consumer-choice health insurance exchanges facilitate defined-contribution financing of health insurance. The objective is not merely to increase supplier competition, but also to make suppliers more responsive to the preferences of individual consumers. A different type of exchange operates on a government “procurement model.” In those cases, while a private insurer may provide the coverage, the covered individuals have little or no say in the decision. The Obamacare health insurance exchange system, though often sold as a mechanism to provide consumer choice and competition, is, in fact, a vehicle for the detailed federal regulation of insurance. Americans can expect less choice and less competition. Given the extreme degree of that regulation, private health plans will soon become “private” in name only.