S.C. needs a state-run health insurance marketplace of its own

People line up outside of the kynect store at the Fayette Mall, Friday, Feb. 13, 2015 in Lexington, Ky., to apply for health insurance through the state exchange. Kentucky is the only Republican state to operate its own health exchange. (AP Photo/Adam Beam)

Even in the most deeply Democratic states, the Affordable Care Act has become toxic.

So it makes perfect sense that Gov. Nikki Haley consistently stymies the law’s reach in South Carolina, including repeatedly rejecting the creation of a state-run insurance marketplace.

Mrs. Haley is not alone. Only one Republican state — Kentucky — has created its own insurance exchange so far. And only 14 states overall have taken the option.

But what seemed like a politically sensible decision for a Republican governor in 2012 may turn out to be decidedly less popular in June if the U.S. Supreme Court rules against the federal government in King v. Burwell. The case will determine whether federal insurance subsidies can legally apply to customers who bought plans on the federal exchange rather than a state-run marketplace.

If the court decides the subsidies do not apply — and the unfortunate clarity of the ACA language in question certainly suggests that could be the case — millions of people will lose their subsidies. That includes roughly 150,000 working and middle-class South Carolinians who make too much money to qualify for Medicaid but not enough to afford health insurance without help.

Those people will not be happy. More troublingly, they could also become uninsured. Nevertheless, Haley has remained steadfast in refusing to consider setting up a state-run exchange.

That’s even in the face of surprising levels of public support for the idea. A statewide poll conducted in December showed a majority of respondents would approve of either the General Assembly or Haley establishing an exchange.

Putting aside the obvious politics of cooperating to any extent with President Barack Obama’s signature piece of legislation, South Carolina’s refusal to take control of its implementation here is something of a departure from tradition.

After all, fiercely independent South Carolina generally fights tooth and nail for state or local control on everything from education to energy, infrastructure and — indeed — Medicaid. So why does it resolutely turn down the opportunity to ensure that health insurance can be purchased in an environment as close as possible to a free-market?

Health insurance marketplaces embrace capitalist principles to provide the cheapest, highest quality coverage possible to the widest range of people. Rather than forcing customers to navigate the labyrinthine options offered by private insurers on their own, the exchanges compile available plans and list them side by side for easy comparison.

Essentially, they work like Hotwire or Expedia for health insurance.

Of course, health care marketplaces are still hamstrung by federal rules governing the types of plans that can be sold and what they must cover. But states are allowed some leeway to make their own guidelines if they set up their own exchanges. And granting even greater leeway would be a perfectly reasonable bargaining chip in future congressional negotiations on health policy.

Health exchanges also still suffer from the outrageous dysfunction of the federal HealthCare.gov website, which continues to have technical problems well into its second year of operation.

And the chaotic setbacks of Obamacare in general — piecemeal implementation, confusing employer requirements, incorrect tax information, etc. — do not inspire confidence. But even if the law were to somehow be repealed in its entirety, serious problems would remain for South Carolina’s health care system.

For example, it’s unconscionable that so many people earning average incomes in this state cannot afford health insurance without government help. And these are people who more often than not work good jobs.

It will take serious reform rather than simple subsidies to address that problem. That means encouraging cheaper preventive services, empowering highly trained nurses to provide more care, attacking administrative fraud and demanding that hospitals focus on treatment rather than gimmicky perks, among myriad other potential innovations.

It also means empowering state and local leaders whenever possible.

To that end, it’s worth considering a South Carolina health insurance marketplace that encourages competition and quality among insurers as a step toward that goal.

Ed Buckley is a member of The Post and Courier editorial staff.