The HHS rule for state health markets will mean fewer choices

'Exchange' You Can't Believe In from the 7-16-11 WSJ. Excerpts:

"On Monday the Health and Human Services Department released draft regulations telling the states how they must run these organizations, which are the core of the new entitlement and are where people will receive heavily subsidized coverage."

"HHS, unsurprisingly, envisions the exchanges as 50 (or more) new regulatory agencies designed to let politics run health markets, while letting Washington give orders to the states. The word "require" appears 811 times in the 244-page rule and its 103-page supplement. "Must" shows up 580 times—"

"The draft rules command that the structure of every exchange needs federal approval, much as in Medicaid, which in practice means an HHS veto of market-based innovation. State standards for the "certification, recertification, and decertification of health plans" will also be subject to HHS."

"It also looks as if HHS will require the exchanges to enforce de facto price controls on premiums.

This is the exchange model that prevails in Massachusetts,..."

"Ms. Sebelius's false gesture toward federalism—states can do whatever they want, as long as they want to do exactly what she wants—also comes with a killer caveat: If states don't set up an exchange, or the exchange they create doesn't clear HHS scrutiny, HHS will impose its own version."