Insurance Companies and Bureaucrats, Obamacare’s Big Winners

| May 24 2012

By Diane Cohen

When the topic is protecting liberty and the headline reads, “Even in Illinois but not in Arizona,” we’re in trouble. Indeed, while even the Democrat-controlled legislature in President Obama’s adopted home state of Illinois said no to establishing an insurance exchange to facilitate the federal health care law, Arizona is moving full steam ahead with its exchange and is using more than $30 million in federal tax dollars to do so.

While exchange supporters euphemistically refer to exchanges as “marketplaces,” exchanges are in fact government-sanctioned, invitation-only clubs where only government-approved insurance companies can sell government-approved insurance. No wonder big insurance companies are lobbying so hard for an Arizona exchange and want them to stand even if the President’s health care law is struck down by the Supreme Court in June – they want to make sure they get an invitation to the party so that they can monopolize the market now and forever. Bloomberg News reported just last week that insurance companies stand to gain billions in revenue over the next seven years from the President’s health care law.

While exchanges will benefit the big insurance companies and bureaucrats who will get jobs, the Arizona taxpayers will be stuck paying the bill. At a Senate hearing last November, Arizona’s exchange director, who previously worked for the very insurance lobby that advocated for the passage of the President’s health care law, said he could not answer the question of how much the exchange will costs taxpayers until it was up and running. We do know the Massachusetts exchange costs taxpayers in that state $60 million a year.

Last fall, the Goldwater Institute sent a public records request to the Governor’s office to find out how much the state is spending on the exchange, including specific requests for the payroll records of all state employees who have worked on the exchange since its inception in March 2010. The response was a mere 33 pages of undated, redacted records, most of which are indecipherable. What little is visible indicates that in addition to paying salaries of some unknown amount, tax dollars are paying for exchange employees’ food, lodging and travel. This non-response appears to be a violation of Arizona public records law and we hope the Governor’s office will soon make a full and transparent disclosure of these records.

States are not required to establish exchanges and Arizona should say no. Instead, it is entrenching the federal health care law, along with a new government bureaucracy and the special interests that go along with it.

Diane Cohen is a senior attorney with the Goldwater Institute.

Learn More:

Goldwater Institute: States Must Protect the Health Care Freedom of their Citizens by Saying No to Federal Health Care Insurance Exchanges

Arizona Governor’s Office: Payroll Records (PDF)

Bloomberg: Insurers face $1 Trillion in Revenue at Stake in Health Law

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