Metropolitik: Is Obamacare a secret capitalist plot?

Is that a pre-existing condition?

With a politically charged Sup­reme Court review this sum­mer, we can expect a renewed frenzy over Obamacare. Like the dark prince, Beelzebub, the Patient Protection and Affordable Care Act is a creature known by many names. And while there is much about the polarizing new law and its enactment process that deserves criticism, many of the most important and interesting parts of the law remain poorly understood.

The exchange system — the network of state-administered markets that the act creates —is the central component of Obamacare, and it provides surprising insight into the law’s approach to state rights, consumer choice and regulated markets.

The exchange system is like an imaginary supermarket that only sells health insurance. To be sold on the exchange, an insurance plan must clearly display its “nutritional facts” to make comparison shopping easier. Each plan must also abide by basic quality standards designed to ensure that every plan sold on the exchange provides an adequate range of coverage for the price. For instance, plans on the exchange must spend at least 80 percent of premiums on health care, instead of things like executive pay, marketing or corporate jets. The exchange excludes plans that deny coverage for pre-existing conditions and puts limits on plans that try to charge more for riskier customers.

In addition to federal regulation, each state can adjust the rules of its own exchange and offer a state-level “public option” to compete on the exchange. With a federal blessing, states can even band together to create regional exchanges. Under the Act, a state can opt out of the exchange system entirely, if it can create an alternative health insurance program that achieves equal or better coverage for the same cost.

But why would any self-respecting insurance company want to play by these new rules and participate in the exchanges? Because only plans on the exchange are eligible to receive the new federal health insurance subsidies.

For those who do not receive coverage through their employer and spend more than 10 percent of their income on health care costs, Obamacare provides a tax credit sufficient to bring those costs below 10 percent — provided one’s health insurance is purchased on the exchange. By 2019, $113 billion in subsidies will be up for grabs each year on the exchanges, according to CBO estimates. Only by competing with the other plans on the exchange can insurance companies hope to get their hands on those juicy federal dollars.

The exchange system is a true capitalist’s solution to the health insurance problem. It creates a regulated marketplace where for-profit, nonprofit and public insurance providers alike compete on the merits for customers who can easily compare the costs and benefits of each plan. And the exchange system gives states the flexibility to experiment with alternatives, while challenging them to compete with one another.

Metro does not endorse the opinions of the author, or any opinions expressed on its pages.


News
Entertainment
Sports
Lifestyle
Local

Best nature spots for kids in New York…

When it comes to kids and nature, most U.S. parents agree: children should be spending more time outdoors. According to a recent survey by The…

Local

Easter 2014: The year's best bonnets

It's Easter, and that means it's time for Fifth Avenue to turn into a veritable catwalk of bonnet-wearers. The annual march, which kicks off at…

Local

Woman arrested for attempted kidnapping of baby in…

Authorities said that a Queens woman behind an attempted kidnapping of an 8-month-old baby boy was arrested on Saturday.

Local

Hate crime charge in attack on Sikh Columbia…

A man has been arrested and charged with a hate crime after he allegedly pulled the beard of a Sikh Columbia University professor as part…

Television

‘Mad Men’ recap: Season 7, Episode 2, ‘A…

Peggy and Lou are horrible, Bert's racist, Don is honest(ish) and Roger and Pete are frustrated. "A Day's Work" not quite worthy of "This Will Be Our Year."

Television

'Game of Thrones' recap: Season 4, Episode 3,…

The problem with the devil you know is that ignoring them doesn’t mean they simply lie in wait. It allows them time to do things…

Television

Discovery cancels 'Everest Jump Live' special in wake…

The Discovery Channel has indicated it will not be moving forward with "Everest Jump Live," a planned special about mountain climber Joby Ogwyn's effort to…

The Word

'X-Men' director Bryan Singer drama continues

  News broke late last week that "X-Men" and "The Usual Suspects" director Bryan Singer is being sued by a man who said Singer molested…

NHL

Rangers let chance at victory slip away in…

All the Rangers had to do was hold serve in a raucous Madison Square Garden — roaring in anticipation of putting a hated rival in a 2-0 series hole.

MLB

Yankees place Ivan Nova on DL with partially…

Yankees starter Ivan Nova was diagnosed with a partially torn UCL in his throwing elbow Sunday.

NHL

Rangers never thought opening round would be 'an…

You might have thought the Metropolitan Division semifinal series was going to be a rout after watching Game 1 Thursday night. The Rangers did not.

NHL

Rangers blow two-goal lead in Game 2 loss…

The Rangers got out to an early 2-0 lead in Game 2 and the Garden was rocking. But it went downhill quickly from there.

Travel

Packing: The one thing you need in your…

A new survey that looks at the travel habits of 50,000 people around the world has revealed that Western and Asian globetrotters have different priorities…

Home

Is your chair making it hard to talk?

Ever wished there was an office chair that could make impromptu meetings and discussions more private? The Cristiana Wing Chair is an asymmetrical armchair which…

Travel

Live large at these luxury hotels

From Thai boxing lessons and macabre Dracula tours to the Australian Outback, the Four Seasons hotel chain launched a series of new travel packages this…

Parenting

4 things that every summer camp should have

Alan Saltz, director of the 92nd street Y program lists things that every summer camp should have.