More About Health Exchanges

By Author: Marcus Stalder
Total Articles: 491
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A new survey in Massachusetts finds 75% of respondents in favor of continuing their universal health care system with two-thirds positively approving it. More kudos to Mitt Romney! This is not what the GOP wants to hear, of course. The leading politicians want both Romneycare and Obamacare repealed. In the meantime, most states have been taking in $2.8 billion in federal funding to expand Medicaid, improve preventative treatments, and design health exchanges where people will be able to buy their new plans. In this context, a report from the National Association of State Chief Information Officers (NASCIO) makes very interesting reading.

NASCIO argues it will be better for states to design their own exchanges for both individuals and small businesses with less than 100 employees (SHOP). The system must allow consumers to compare the prices of all the available plans based on benefits, services, premium rates and a "quality" rating. The exchange must allow transparent competition and avoid the current problem of bad value-for-money where high administrative costs are deducted before picking up the patients' bills. This ...
... will be complicated to create and so NASCIO suggests states pool their efforts to create a standard package all contributing states can adopt. If every state is going to try creating the same code, some will succeed in the time available, but many will fail and budgets will be wasted.

As models we already have Massachusetts Connector and Utah's Exchange. Building on their experience would save time and money. It would also produce a better quality result which is to be administered by the state or a non-profit entity - this includes the operation of a toll-free hotline and an online calculator to show how much a plan will cost taking account of any tax credits and cost-sharing reductions. All citizens must be able to discover whether they are eligible for help under Medicaid, CHIP, and so on. This can only happen if the exchange system can work with the Internal Revenue Service, Social Security Administration, and so on. The federal government expects every state to give their citizens a first-class experience. The accounts for running the exchanges must be audited and published, showing the exchanges are self-supporting and good value-for-money. Given the long list of features to be included in this specification, the sooner state start the planning, the better. If they do not make good progress, the federal government will impose its own exchange.

Even if we only look at one feature - that all the health plans must be presented in standardized format - the problems are immense. All the insurance companies must cooperate and supply the information about their plans in the same format. This will require the insurers to redesign their IT systems to interface with the new exchanges so that details of new plans can be available through the exchanges without separate uploading. The work expected of all interested parties is immense. So is it all going to be worth it? The experience in Massachusetts suggests the answer is "yes". Individual health insurance through the new exchange has proved popular. More importantly, even though the premium rates have been rising, local citizens accept this is not the fault of their universal health insurance law. Costs are rising everywhere.