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Arizona Should Not "Exchange" Healthcare Freedom for Government Control

October 7, 2014

The most effective way states can defend their citizens’ healthcare freedoms is by refusing to establish state-run health insurance exchanges. The federal healthcare law devised these bureaucracies to facilitate the sale of federally-regulated health insurance. But a state need not set up an exchange – if it declines, the law authorizes the federal government to create one in that state.

Some state policymakers have been sold the false bill of goods that setting up their own exchanges would shield their citizens from federal control. But Washington bureaucrats have the final say even in state exchanges about which doctors and insurance plans can participate, and which benefits must be offered. What’s worse, states that create exchanges must surrender to the federal government sensitive information about their citizens’ healthcare choices.

There are other reasons to decline to set up a health insurance exchange, too. Through the state-run exchanges, private insurance companies will receive billions of dollars in direct taxpayer-funded subsidies. But these subsidies are not doled out in federally-run exchanges if states refuse to participate. Additionally, a state exchange would impose crushing burdens on local businesses. Employers of more than 50 people that do not provide federally-approved health insurance could be forced to pay fines of at least $2,000 per employee per year. But no such penalties exist if a state declines to set up an exchange.

States that set up exchanges are putting their taxpayers on the hook for carrying out these federal mandates. While federal funding for “startup” assistance is available now, after 2014, states will be fully responsible for shouldering the costs running their exchange.

Florida, Wisconsin, Texas, and other states across the country have rejected exchanges. Arizona should join these states in protecting healthcare freedom by declining to set up its own exchange. To learn more about this and other steps states can take to maximize individual choices in healthcare, download the Goldwater Institute’s latest Policy Memo: Next Steps on Health Care Policy.

Learn more:

Arizona Republic: A Welcome Mat for Obamacare in Arizona

New York Times: Liking It or Not, States Prepare for Health Law



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