Ohio Doesn't Want Obamacare Exchanges To Work

Otherwise, as Luke Brockmeier and the Plunderbund crew point out, they would have gone California's route.

Ohio is establishing a “clearinghouse exchange”, wherein any plan that meets the Obamacare standards will be offered. Since 214 plans were submitted for review, there will be 214 plans on the exchange. This is intended to drive down costs the way that Travelocity does: people will pick the less expensive plans on the list.

There’s not much evidence that this will do anything; after all, similar websites already exist.

California, on the other hand, has an “active purchaser exchange”. In an active purchaser exchange, it’s actually the exchange that’s insuring you, and they bid out administration of your insurance. This drives down costs a few ways.

And because of true competitive bidding, negotiated lower payments through the power of the exchange's mass, and long-term cost reduction through preventative care, Californians will see Obamacare work.

Ohioans, not so much.

In Ohio’s exchange, 17 separate collective bargaining units won’t be able to bargain the way that California’s active purchaser will. California’s payments will probably be in the neighborhood of Medicaid and Medicare rates, which are around 60% of private payments.

Since health insurance is just an aggregate of all health expenditures, a 40% reduction in payments means a 40% reduction in premiums. In fact, a really canny exchange will combine the Medicaid and exchange risk pools and bargaining powers.

But of course, since Ohio is run by Republicans, they can simply make the plan not work and blame Obama.  Much more on Lt. Gov. Mary Taylor, who is in charge of the exchanges in Ohio, on Plunderbund.