WSJ: Who Will Regulate the Proposed Insurance "Exchange"?

Among the major differences between the House and Senate healthcare reform bills is this issue: Who will oversee the newly created competitive insurance "exchange"—a sort of Expedia.com equivalent for the 30 million people without job-provided health insurance? The House bill proposes national regulation of the exchange; the Senate wants state-level oversight. Both Congressional bodies have their points, according to today's WSJ.

House Democrats want federal regulation to promote consistency and thwart insurers who would try to create and exploit loopholes at the state level. House legislators believe they're owed this concession in exchange for eliminating a new government public insurance plan in the final bill.

The Senate and the insurance industry, on the other hand, want states to regulate the exchange—arguing that state administrators have a better understanding of the local markets and their consumers. Proponents of state regulation also cite the substandard federal regulation and abuse of Medicare Advantage plans.

Another bone of contention for the insurance industry is the Senate's proposed tax on high-premium group-health plans—a tax that is intended, in part, to finance healthcare reform. Insurers want the tax reduced and phased in. Otherwise the industry will have to pay up to $224 billion during the next decade, estimates a top insurance lobbyist.

For the record, President Obama wants the tax on high-premium group-health plans in the final bill.