Realtors Online is not a Health Insurnace Exchange Model

President Obama says health insurance exchanges work like a Real Estate website. He’s expecting you won’t think too deeply about it, because if you do, you’ll see how foolish a comparison it is.

Let’s buy a house using online tools at the current “Real Estate Exchange.”  We enter data about where we want to live, how much we are willing to spend, and other desirables such as distance to schools, churches, parks, and other amenities.

Once we enter our data, the web engine spits out some options. Then we call a realtor. We do not point, click, and purchase the house that looks right for us. But let’s consider for a moment that President Obama designed a Home Owner Purchase Exchange (HOPE) and we did purchase homes this way.

First, we find limited choices: maybe five models. These might range from 800 square foot starter homes (or retirement homes) to extravagant 1,400 square foot family homes. To make sure states feel they are a part of the plan, the federal government would allow legislators to design the interior and exterior, as long as they stay within federal limits.

Our HOPE works like the Massachusetts CommonwealthConnector, the nation’s “most successful” health insurance exchange, with its seven plan choices – down from 24 at its inception. Why? Because the Connector is not capable of providing customized choices, and the people do not know there are many options beyond what the Connector offers.

Second, the primary reason we want to purchase our home on the HOPE is to receive federal mortgage payment subsidies. Why not? If an insurance exchange is like a Realtor website, then the HOPE would have mortgage subsidies (WARNING: do not share this with any member of Congress). In the HOPE, our federal government pays part of our mortgage based on our income, or lack of income. So what if we only have seven home styles from which to choose: We should be thankful that the government allows us so much freedom.

In Massachusetts, the average health insurance premium for a non-smoker 40-year old on a family policy is $2,000 a month – more than a mortgage payment. The Connector does not reduce premiums, it just uses taxpayer money to help reduce the individual’s share of premium.

Now, here is how the real world Real Estate Exchange works as a private market health insurance exchange: Go to http://dci.buymnhealthinsurance.com/plansearch.aspx and you will find 137 health insurance choices. After you input basic data, you will want to talk with the agent about the one that best fits your situation.

Private market health insurance exchanges already exist. If the goal of the federally imposed exchanges was simply to help people find health insurance, it has no need: The need is already being met in the private market.

So why does the ACA require a federal/state health insurance exchange when http://dci.buymnhealthinsurance.com/plansearch.aspx already exists everywhere, all across the nation?

The primary purpose of the exchange is to subsidize health insurance premiums. When the federal government achieves its goal to subsidize the health insurance premium payment of up to 60 percent of the population, it will control all of health care.