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The Healthcare Prisoner’s Dilemma

Article:

http://www.michigancapitolconfidential.com/15764

The issue of healthcare in recent years has no doubt been divisive. Since the passing of President Obama’s Patient Protection and Affordable Care Act (PPACA) in 2010, there has been much concern over the future of healthcare and whether we as a nation are headed towards universal coverage. One of the major provisions of PPACA is the establishment of health insurance exchanges in each state. Ideally, the purpose of these exchanges is to create a transparent market place for health insurance consumers. Competition will focus mainly on price rather than variability of coverage from plan to plan and thus attract a healthier applicant. The federal government plans to provide subsidies to those purchasing insurance from these exchanges.

The prisoner’s dilemma situation arises when the federal and state governments enter a tug-of-war with regards to how much discretion they have over these state run exchanges. The aforementioned article expresses Governor Rick Snyder’s concern over loss of state control. The author of the article believes that PPACA has created a “prisoner’s dilemma” for governors and legislators.

In one possible scenario, if a state chooses not to institute an “Obamacare Exchange”, then the federal government will inevitably set one up. State lawmakers feel that this would cause a severe loss of state control. On the flip side, if the federal government offers total state control of these exchanges, there is federal fear that states won’t conform to the standards that were mentioned in PPACA. If both sides choose not to take action, then America has not moved any closer to solving the healthcare issue and easing the needs of those who lack coverage. If both sides choose to work together, progress will most likely be made, however the plan will probably stagnate and not be fool-proof since both sides seem staunchly opposed to each other. (The negative payoff’s for each side in this scenario are probably not as bad as when both sides choose not to work with each other)

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