I rise for the Commerce Committee in support of the committee’s report of Ought to Pass as Amended for HB 1297, which is a bill that I sponsored. HB 1297 prohibits state officials from planning, creating, or participating in a state health insurance exchange, which is an option given to states by the Patient Protection and Affordable Care Act of 2010. Under the terms of the act, states may set up a state insurance exchange (and pay for it starting in 2015) or default to a federal insurance exchange, which in either case is a federally run bureaucracy that administers the mandates, regulations, subsidies and penalties dictated by the federal health care overhaul forced through Congress by our president. In the case of a state exchange, state bureaucrats will essentially serve as conduits for federal edicts.
To be clear: this bill as amended would be the state’s best response to the president’s federal act because it would contribute to a nationwide effort by a majority of states to force the amendment, repeal or replacement of this bad public health care policy. Due to a design flaw in federal law that provides subsidies to insurance companies only through a state exchange, and not in states defaulting to a federal exchange, Congress will have to reopen the federal law to address this issue or face the monumental and apparent costs of the overhaul and the increased public opposition that will come with it. Regardless of the outcome of the next election or of the pending U.S. Supreme Court Case, this practical reality will force Congress to change the federal law, and it’s possible that a federal exchange will never be imposed on us as a result. In reality, prohibiting the implementation of a state exchange is an even better strategy for our state than joining the 28-state lawsuit against the federal act. That means that passing this bill in New Hampshire and other states is the most effective way to ensure that better and more affordable market-based health care reform is advanced in Congress.
The idea of a state exchange option was installed into the federal act using “local control” rhetoric to encourage states to voluntarily pursue the idea. This rhetoric worked for a time, but now even early leaders on the idea of adopting a state exchange have backtracked after further study. Contrary to those arguing that a state exchange would help New Hampshire maintain control over its insurance regulations, the federal law itself says exchanges can be established “only as prescribed by the HHS Secretary.” The federal secretary may change the rules without additional approval at any stage in the game, and the state exchange must comply. So while a state exchange would be entirely controlled by federal regulators, just like a federal exchange would, the state of New Hampshire would have to pay anywhere from $10 million to $30 million a year to operate a state exchange starting in 2015. Where are we going to get that money?
The committee amendment to this bill removes a provision that would have prohibited the state’s involvement with a federal exchange, and that would have cost the state Medicaid money. With the amendment language, this bill will not cost the state Medicaid money because it only prohibits a state health insurance exchange.
Only 37 percent of the population supports the provisions in the federal health care overhaul. Thus, it is reasonable for us to put this blockade in place to ensure our departments are not spinning their wheels and spending the people’s money for no reason while everything is worked out in Washington and our way forward becomes more clear. It will be much easier to take appropriate action when we know the details, and much harder to roll back the implementation of the federal act if we don’t pass this bill now.
In conclusion, this bill contributes to a nationwide effort to amend, repeal or replace the federal health care overhaul, it preserves the prerogative of the N.H. Legislature to decide whether to create an exchange in the long run by maintaining the state’s federal health care reform oversight committee, and it prevents the executive branch from committing the people of New Hampshire to an enormous expense without first consulting the people’s representatives.
For more information on why state exchanges are a bad idea, please read the following reports from the Josiah Bartlett Center for Public Policy Studies, the Cato Institute, the Goldwater Institute and the Idaho Freedom Foundation.
