As part of Obamacare, the federal government requires Alaska to set up what is called a Health Insurance Exchange. Alaska Policy Forum has raised awareness of the problems it would create for Alaskans here and here. There are a lot of assumptions floating around about Health Insurance Exchanges that simply aren’t true.
David Boyle and Jeremy Thompson interviewed Michael Cannon from the Cato Institute about the danger that Exchanges pose to Alaskans. In short, if Alaska wants to bring down the cost of health care, not only are Obamacare exchanges not going to get the job done, they will actually drive up health care costs for Alaskans.
Here are several clips from the interview with Michael Cannon.
An argument often made by even those who are opposed to Obamacare.
Some point to the state of Utah as an example of how an Exchange can work in a free-market friendly way. Not true. In fact, Utah shows how Exchanges will drive up health care costs.
If Alaska refuses to set up an Exchange, it’s unlikely the federal government will do it. They’re broke and they didn’t set aside any funding in the actual law for setting up Exchanges.
Another argument that is often used in favor of Exchanges is that setting up one will give us more leverage. Cannon says that one can’t protect oneself from being hit when one is providing the club.
Exchanges are expensive. They won’t save money, but they will cost plenty.