Glenn Hamer

There’s a feeling among some in the state Legislature that putting the wheels in motion to establish a health care exchange, as called for by the Affordable Care Act, is somehow tantamount to endorsing the entire federal health care plan.

But as this Wall Street Journal editorial makes clear, “A posture of indifference is tempting, but it also means an all but certain death warrant for businesses and jobs when HHS eventually takes over.”

That’s because if the states don’t design a health care exchange on their own, then the federal government will do it for them.

You’ll recall that our state faced a similar situation earlier this year with unemployment insurance.

The UI system is one in which state and federal government, under the Federal Unemployment Tax Act (FUTA), come together to fund the benefits system. The cost is borne by Arizona employers via a .8 percent FUTA tax on the first $7,000 of an employee’s wage.

The recession took its toll on the state’s UI fund. The demand placed on the fund was so great due to high job losses that the fund last year became insolvent. So in order to be able to continue to pay jobless claims, Arizona in March 2010 began borrowing over $300 million from the U.S. Department of Labor to replenish the fund, joining 31 other states that found themselves in a similar situation

But soon it was time to pay back the loan. Arizona could have either passed legislation that implemented a temporary assessment on employers that would be used to repay the loan, or we could have left the repayment terms up to the federal government.

Thankfully, we chose the former, especially considering that the costs to be borne by employers under the feds’ plans were going to be steep.

And such is the case with the federal health care plan. Arizona can’t afford to have the Obama administration design a health care exchange from Washington, D.C. If we leave it to the feds, we risk being saddled with an exchange that limits the choices available to individuals and small businesses and adds many new layers of regulations.

While many aspects of the federal health care overhaul were poorly designed and have already done harm to the economy, it currently remains the law of the land. We either respond accordingly, or we suffer the consequences. Moving forward with an Arizona-based exchange is highly unlikely to impact any of the lawsuits that are moving forward to challenge other aspects of the Affordable Care Act.

Based on recent projections, the Arizona-based exchange could enroll 497,000 people in the individual market, 515,000 people in small group and 247,000 into AHCCCS. Most of these individuals will come from the uninsured, which could reduce our uninsured rate from 19 percent to 11 percent. This reduction in the uninsured would ease the pressure from uncompensated care on providers and lessen the cost shift to employers and individuals with private health insurance, a cost shift also known as the hidden health care tax.

Arizona lawmakers and the health care community should work closely to design a health care exchange. An Arizona-designed health care exchange isn’t an endorsement of a federal health care system; it’s recognition that we know better how to design a system for our state than Washington bureaucrats.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry