Is the Federal Blueprint for Health Insurance Exchanges Too Ambitious?

If the Affordable Care Act (ACA), also known as the Patient Protection and Affordable Care Act (PPACA), remains as is, beginning in 2014 consumers without employer-sponsored health insurance will be able to purchase health insurance through health insurance exchanges (HIX is the approved acronym for these entities). The intent of implementing state-based HIXs is to create a more competitive marketplace through which the uninsured can purchase health insurance. HIXs would offer consumers a choice of private health insurance plans (and perhaps a public option, as well), and these plans will be required to follow standardized rules with regard to the services covered and cost sharing (deductibles, copayments, and out-of-pocket expenses) so that consumers can easily compare plans.

Like any good intention, in theory HIXs sound like an ideal way to provide health insurance coverage to the many Americans without health insurance. But what will the effect be on the healthcare marketplace in general? And in this period of declining federal funding, how will states fiscally plan for and implement HIXs?

On March 12, 2012, the federal government released a complex set of regulations for the implementation of HIXs that will match up uninsured Americans with coverage to meet their needs. These proposed rules supersede those released in October 2011, which identified a set of minimum standards for HIXs and were perceived as being incomplete, making it difficult for states to make informed decisions about whether to proceed with the establishment of HIXs.

Already, more than 20 states have brought lawsuits against the ACA and are awaiting the Supreme Court decision before planning for the implementation of HIXs in their particular state. The high court begins 3 days of arguments on March 26, with a decision expected to come no earlier than June 2012. Other states are concerned that failure to move forward with the creation of state-based HIXs presents an opportunity for the federal government to put its imprimatur on the state’s HIX while limiting state input. It’s tough to predict exactly how this will all shake out. We believe that it will be difficult to establish 50 different state exchanges, even if the ACA garners more support.

If HIXs go forward, however, it is our opinion that we’ll see an increase in the number of people seeking healthcare services, and we’re likely to have a shortage of certain kinds of providers in certain kinds of settings. Are we correct? Individuals who today have no insurance and must pay healthcare costs out of their own pockets will be able to comparison shop and purchase insurance for themselves and their families, with costs subsidized according to their ability to pay.

Do you think the government should mandate HIXs? Should the government control health benefit inclusions and exclusions or allow the marketplace to ultimately drive these determinations? Coverage of birth control drugs is one example of many areas of controversy. What effect will HIXs have on your business model?

Topics: Hayes Blog

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