My critique of Gov. Haley Barbour’s exchange plan is at the DC Examiner today. Given Mississippi’s exceedingly poor population, under the exchange Barbour has endorsed combined with Obamacare, 76% of his state’s population will be eligible for subsidized care through Medicaid or the exchange — and combined with the data from the recent Health Affairs study regarding the churning effect and elsewhere, this translates to massive administrative costs, gaps in coverage, and a massive disincentive for success. An excerpt:
No Republican governor has been a greater fan of exchanges over the past few years than the most politically powerful of them all—Mississippi’s Haley Barbour, who is now openly considering a run for Obama’s job in 2012. Even before the president and his allies forced their ill-advised insurance overhaul through Congress, Barbour had endorsed the exchange concept for Mississippi and three times unsuccessfully supported state legislation to that effect. And in a Heartland Institute survey of all Republican governors conducted last month to find out how many of them would support a sunset provision—which would dissolve the exchanges should Obamacare be repealed or struck down by the Supreme Court—only Barbour rejected the concept.
Yet past experience shows Barbour’s proposal would create more upheaval in the marketplace, institute a near-permanent subsidized existence for the vast majority of Mississippi families, and ignore the lessons of the disastrous failure of the exchange-based health care scheme passed by one of his likely 2012 opponents, former Massachusetts governor Mitt Romney.
In speaking with Barbour’s staff, I believe they dramatically underestimate the negative ramifications of these subsidies and the level to which they discourage success — and the fact that without a sunset provision, if PPACA is overturned by the courts or repealed by the Congress, there will be a powerful clamor to keep some form of these subsidies intact.
The one hard and fast rule in policymaking is that people will always go where the free money is. Barbour has evidently not learned this lesson.