New Galen Institute Paper Exposes why Health Insurance Exchanges Defined in PPACA Won’t Work

Health insurance exchanges required in the Patient Protection and Affordable Care Act (PPACA) won’t work, won’t increase access to affordable health care, and won’t improve health outcomes or increase value, according to a new Galen Institute study.

The paper by Rita E. Numerof, Ph.D., entitled “What’s Wrong with Health Insurance Exchanges...,” explains the problems states will face if they go down the path of creating PPACA health insurance exchanges. The exchange requirements will result in the creation of administrative behemoths that will limit individual choice and drive up costs, just the opposite of their intent.

Numerof describes in detail why the state insurance exchange requirements are unrealistic and burdensome. These include intensive data-gathering responsibilities that delve into an individual’s private affairs, adding new costs for states and employers, as well as strict federal over-regulation of insurance choices.

“Rather than focusing on compliance with PPACA and assume its burdens, legislators should take inventory of the problems plaguing the health insurance markets in their states," Numerof concludes. "Then they can confront the most critical issues of insurance coverage, care delivery, and payment reform to ensure that residents have access to affordable care and enjoy better health outcomes at lower cost. A subsequent paper will offer recommendations on a framework for finding the right solution for states’ unique needs.

“Like most of the health law, state insurance exchanges will fail in meeting its goals of lowering costs and providing more choices,” said Grace-Marie Turner, president of the Galen Institute. “The way to increase access to affordable health care is not through more complex and onerous bureaucratic rules, but rather by reducing barriers to competition and consumer choice and removing regulations that make coverage unaffordable today.”

Dr. Numerof is co-founder and president of Numerof & Associates, Inc., a strategic management consulting firm. Please contact Tara Persico to speak with Dr. Numerof or Grace-Marie Turner about the paper. The full paper is available on our website.

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