It looks like Maryland is going to rush ahead to implement ObamaCare’s health care exchange – a government-run clearinghouse for health insurance purchasing. Lt. Governor Anthony Brown claims it will reduce health insurance costs. That’s unlikely. What’s far more likely is that this exchange will actually increase the cost of health insurance, will cost the state more than expected, and will decrease consumer choice.

As this piece in Forbes explains, a health insurance exchange causes a variety of problems. The Massachusetts Connector – the model for the health insurance exchanges in the federal bill – hasn’t held down health insurance costs. In fact, the health insurance premiums in that state are the highest in the nation.

Some individuals will get subsidies for purchasing health insurance through the exchange. A subsidy isn’t making something cheaper – it’s just shifting the cost. Real health insurance reform would actually lower the cost of health insurance, not just shift the burden of paying for it to taxpayers.

Setting up an exchange may also cost the state millions of dollars. Maryland has received some funding from the federal government to begin work on an exchange, but there is no guarantee that the feds will cover the full cost of implementation.

Joseph Colletti of North Carolina’s John Locke Foundation makes the case for the state of NC taking its time in setting up an exchange and, possibly, letting the federal government do it instead. His views apply equally as well to Maryland:

 …Whatever form the rules take, they will make insurance more expensive, as you and your employer may have noticed with changes already linked to ObamaCare.

Despite fears about federal control, in the end it will not matter who establishes an exchange. The federal government will ultimately control everything the exchange does. Federal Health and Human Services Secretary Kathleen Sebelius has specified four areas of flexibility available to states: They can bar insurers from participating, require more benefits, opt out of the exchange to create a single-payer system, and define who sits on the board of the exchange and its "operational philosophy." This is not real flexibility. There is no room to opt out of mandates and regulations that pre-empt competition and innovation.

…Exchanges are complex, costly and confusing. With no time constraint, it makes sense to delay creating one until constitutional questions and federal rules are settled. A study committee would help clarify what an exchange must do and how it should do it. At the very least, legislators need to understand how much it will cost taxpayers to make an exchange self-sustaining.

Unfortunately, our legislators and governor are rushing into doing this. It’s very unlikely that the health insurance consumers or the state’s taxpayers will be better off as a result.