Well, we can all breathe a sigh of relief. The health insurance brokers are happy with legislative action to set up a health insurance exchange in Maryland as mandated by ObamaCare. Oh, wait, I guess all these brokers have done is make sure their jobs won’t be threatened for at least a little while. The rest of us, though, are still going to be in trouble when this exchange is set up.

Maryland is rushing ahead in implementing its health insurance exchange, the “marketplace” run by the government where individuals and small businesses can buy insurance. The exchange was sold by President Obama as a key way to help bring down health insurance costs. Too bad that a similar exchange in Massachusetts isn’t working all that well.

In my paper about how ObamaCare will affect Maryland, I touched on the exchange. Due to the uncertainty of how much it will cost to establish and operate, my opinion is that Maryland loses nothing by having the federal government step in and run it. In fact, we’d likely save some money doing this. Clearly that isn’t going to happen, though.

What happens when Maryland and other states set up their exchanges? Michael Cannon of the Cato Institute has a depressing prediction:

Tens of millions of Americans will begin to receive thousands of dollars each in government subsidies, whether through an expanded Medicaid program or Obamacare's new health insurance "exchanges." Medicare's chief actuary predicts that these state-based exchanges will slowly crowd out other private coverage (such as through employers) until "essentially all" Americans get their health insurance through them. Just as important, whatever private insurance companies are still standing in 2014 will begin enrolling tens of millions of customers through the same channels. With boots on the ground and deep pockets, these two constituencies will quash any effort to eliminate their new subsidies. Public opinion may even turn in favor of the law — not because Obamacare works, but because tens of millions of people will be dependent on it for their health insurance.

While on a radio show recently, there were a few people who called in to support the exchange because they felt it would lower the cost of their insurance. They said, correctly, that someone buying health insurance for himself or a small business will spend a huge amount of money.

The exchange won’t bring down the cost of insurance, however. It will, in fact, probably increase it because of the extra mandates on it. Some people will get subsidies to purchase health insurance in the exchange but a government subsidy doesn’t decrease the actual cost of insurance, it merely shifts the cost to another payer.

The real problem we have today is the unsustainable increase in the cost of both health care and health insurance. A health insurance exchange won’t fix that. All it will do is add to the unsustainable increase in the cost of government.