(LEXINGTON, Ky.) – A new policy brief released today by the Bluegrass Institute, Kentucky’s free-market think tank, recommends that the commonwealth not move ahead with its costly – and controversial – health insurance exchange.

Even though the federal “Patient Protection and Affordable Care Act” does not force states to create their own exchanges, Gov. Steve Beshear insists on spending the $67 million in federal grant funding – more than any state except New York – from the federal government to set up an exchange.

In his policy release entitled “Insurance Exchanges in Kentucky and the Health Care Reform Bill,” University of Kentucky economist John Garen, Ph.D., describes the exchange as “essentially a website where consumers can find individual health insurance plans and prices that are available to them.”

But such exchanges are costly and unnecessary considering “a Google search quickly reveals many websites where comparison shopping for individual health insurance policies can be done,” he said.

Noting that “states really do not have much flexibility in setting up their exchanges” and “are merely carrying out the dictates of the federal government,” Garen warns that Kentucky would be responsible for “the expenses of operating the exchange” after federal funding runs for the project runs out and for enforcing the “counterproductive incentives embedded” in the exchange’s rules.

“The state will take the blame for difficulties high-risk consumers will have in getting coverage, for people dropped from employer coverage onto the exchange and for the healthy who are forced to buy overpriced insurance,” Garen writes. “Better to leave the federal government with the expense and headache of its own creation.”

Read the policy brief here.

For more information, please contact Jim Waters at 270-782-2140 or jwaters@freedomkentucky.com