Curmudgeon's Corner

State Insurance Exchanges

Posted by Al Campbell on Dec. 6, 2012

Wisconsin, U.S., Taxes, Healthcare, Quality of Life, Economy, Employment

As we move toward full implementation of PPACA, or ObamaCare if you prefer, there will be more of these kinds of stories.  Minnesota has decided that it will host a statewide insurance exchange.  As you will recall, Governor Walker declined to make a similar commitment for Wisconsin and deferred to the federal government.

Governor Mark Dayton of Minnesota released the estimated cost to his state of one year of operating the state’s exchange.  That cost is now estimated to be $54,000,000 up from earlier estimates of $30 to $40 million.  That money has to come from somewhere and new taxes seem to be a virtual certainty.  Those taxes work their way down to each citizen in Minnesota in one form or another.

A significant part of Walker’s decision was said to be the cost that Wisconsin would bear and the fact that it was open-ended with no identifiable topside limits.  Minnesota seems to be proving that what Governor Walker was concerned about is very real.

California has made it official that insurers will be taxed to cover the costs of its exchange.  The money to pay those taxes will come from increased costs for the health insurance everyone is going to be required to carry for themselves and their families.  Current estimates of that cost impact show that each person will see a monthly increase of some $60 in their health insurance premiums simply due to the tax insurers will be required to pay to operate the state exchange.

The impact of PPACA will be felt in many ways and most of those ways have yet to be identified.  We do know that small employers are struggling now with the costs of providing health insurance for employees, and we have a good idea that those costs will increase significantly under PPACA.  That will affect the employees of those employers in many ways.  Some will lose their jobs.  Some will see their hours cut.  The new law says that employees cannot be required to pay more than the equivalent of 9.5% of their compensation for their health insurance coverage.  That won’t make a dent in the total cost and employers will have to find a way to stay in business and cover these added costs.

The ripple effect of this law will flow through every nook and cranny of our society, and we have no real idea of just how great the impact will be at this time.  Of course, Congress in its wisdom made sure it wouldn’t be impacted by PPACA.  If it is good enough for you and me shouldn’t it also be good enough for Congress?

Maybe if Congress was unable to keep itself from being impacted by the laws it passed we might have better laws and fewer laws.  Just a thought.