Obamacare’s future depends in large part on the success of the health-insurance exchanges it envisoned being set up on the state level. The exchanges are supposed to provide an insurance marketplace where people will be able to buy health-care coverage and receive subsidies for it.
Only 17 states have agreed to set up their own exchanges, with the rest opting to have the federal government manage them. Several states are suing the government, saying that the law doesn’t provide for the federal government to provide subsidies on the exchanges it sets up.
But even states that are setting up exchanges are finding it tough going, with health-insurance premiums for the plans being offered costing more than expected and the rules being created an administrative nightmare.
Henry Chao, deputy chief information officer at the Centers for Medicare and Medicaid Services, admitted his doubts about the state implementation of Obamacare to a group of health-care executives recently. “We are under 200 days from open enrollment, and I’m pretty nervous,” he said. “The time for debating . . . is it a world-class experience, that’s what we used to talk about two years ago. Let’s just make sure it’s not a Third World experience.”
The exchanges also have to be set up during an era of political correctness, and that may be another obstacle to their effective operation. Take Illinois, where a bill creating the state’s health-care exchange passed the state senate on May 23 and is heading for a vote in the state house. Both chambers are dominated by liberal Democrats.
The bill sets up an eleven-member board with full governing and administrative powers over the exchanges. One aspect of bureaucracies in less-developed countries is that the members of regulatory boards are often chosen on the basis of politics rather than pure merit. That would appear to be the approach in Illionis. There’s a peculiar provision in the authorizing language of the board:
The Governor shall make the appointments so as to reflect no less than proportional representation of the geographic, gender, cultural, racial and ethnic composition of this State . . .
There are also requirements for representatives from labor groups, consumer groups, and other advocacy organizations. It’s no surprise that no taxpayer representative is specified.
Sponsors of the bill didn’t return phone calls seeking clarification. There are two ways to interpret their wording about proportional representation; either way, it is both awkwardly written and very silly.
The question is, what does “no less than” modify? Is it meant to require proportional representation of at least geography, gender, culture, race and ethnicity? Or does it require that geographical, gender, cultural, racial and ethnic group receive at least proportional representation? Given the placement of the the words “no less than” before the word “proportional,” I am inclined toward the latter interpretation, but if that’s what they mean it is a mathematically impossibility.
The plan is for the state’s exchange board to have only eleven members. If every racial and ethnic group must have at least proportional representation, that would require groups with less than 9 percent of the population to be rounded up to get a seat on the board. Groups with, say, 15 percent of the population would have to be rounded up to give them two seats. If instead the governor were to round down, these groups would have been given “less than” their proportional representation. It is impossible to give all racial and ethnic groups at least their proportional representation.
Take Chicago, which is the ultimate melting pot of different races and ethnicities. You can’t ensure that Poles, Mexicans, Puerto Ricans, Irish, Lithuanians, Hawaiians, Samoans, Salvadorans, Italians, Haitians, Dominicans, Koreans, Chinese, Pakistanis, Estonians, Swedes, Menominees, and every other group are all given at least their proportional representation in the state population on the board, unless you expand the size of the board to a few million members.
Even if we go with the other interpretation of “no less than” and assume that proportional representation need be roughly achieved, appointing members of this board will still be like solving a Rubik’s Cube puzzle. In another part of the bill, member are required to be expert in an least two among a list of areas of expertise needed. Where do they think they will find a female, Polish, downstater with expertise in health-care finance and information technology who represents a labor interest group and who doesn’t work for an insurance company?
I am also amused by the requirement of “interest group” representation. It is not enough to appoint a disabled person, a woman, a small-business owner, or a member of a “minority” group. The designated representatives actually have to be representatives of advocacy groups.
Based on 2012 census data, here’s what the breakdown of an 11-member board would look like on solely racial lines:
White alone 8.62
Black or African American alone 1.61
American Indian and Alaska Native alone 0.05
Asian alone 0.53
Native Hawaiian and Other Pacific Islander alone 0.01
Two or more races 0.18
And 1.77 (mostly from the white members) must be of Hispanic origin.
All of this would be funny if it were not for the fact that the board will have real power — for one, certifying every health-insurance plan offered in Illinois. Even liberals are worried about the type of board the Illinois legislature is rushing to create.
Brian Imus of Illinois Public Interest Research Group said the measure lacks an independent governing board with any real power to negotiate better premium rates for consumers.
“This is too important to rush through in the last few days in session,” Imus told the Associated Press. “We absolutely need a state-based exchange, but we should do it right.”
So far, it looks like Illinois would rather be quick and politically correct than right.