Devoted users of Internet radio apps like Pandora may soon hear unexpected sound bites on their favorite music channels – ads touting ObamaCare.
That’s right. In an attempt to drum up support for the law’s health insurance exchanges, some states are planning advertising campaigns that could include everything from pro-ObamaCare coffee-cup sleeves to spots on popular music-streaming sites.
But no amount of advertising spin can obscure the fact that ObamaCare’s insurance exchanges are shaping up to be disasters – saddling some consumers with higher premiums and state taxpayers with significant new spending obligations.
ObamaCare calls for the creation of state-administered health insurance exchanges, where Americans without employer-provided coverage can shop for government-approved policies. Enrollment is scheduled to begin Oct. 1, and coverage will take effect in 2014.
Those with incomes between 133% and 400% of the federal poverty level – up to $92,200 for a family of four as of 2012 – will qualify for federal subsidies.
States were given the choice of setting up their own exchanges, partnering with the federal government, or letting the feds handle things entirely.
Nineteen have opted for the first choice, and seven have signed on for a partnership.
Wisconsin Gov. Scott Walker is among the 25 governors who have refused to set up a state-based exchange. As Walker noted, “No matter which option is chosen, Wisconsin taxpayers will not have meaningful control over the health care policies and services sold to Wisconsin residents.”
Walker is right. The federal Department of Health and Human Services (HHS) dictates that all policies sold on the exchanges must meet one of four classifications: platinum, gold, silver or bronze. These categories indicate the percentage of health costs a plan covers for the average person: 90% for a platinum policy, 80% for gold, and so on.
Deductibles for all plans will be capped at $5,950 for individuals and $11,900 for families, with the limits adjusted over time for inflation. Such mandates prevent insurers from offering low-cost products that may best fit a family’s budget.
ObamaCare doesn’t just set the rules – it also tasks states with enforcing them.
Running an exchange could therefore get pricey. Indeed, the law indicates that states with their own exchanges must devise a source of revenue for running them independently beginning in 2015.
That’s one reason New Jersey Gov. Chris Christie has opted not to set up an exchange, arguing that “the federal government cannot tell us what it will cost.”