Health Insurance Exchanges: Will They Work?

[groovedaddy]

It is the sleeper issue in the current health care debate. Despite all the disagreement in Washington, every proposal now before Congress to overhaul the nation’s health care system includes creation of an insurance “exchange” — a marketplace that would operate something like a Travelocity Web site for insurance policies.

In theory at least, the exchange would fix a fundamental flaw in the present system by giving small businesses and individuals a broad choice of insurance policies at competitive prices. Right now, such buyers typically have few affordable options.

The idea of an exchange has support from the White House and many in Congress — from people who also advocate including a government-run insurance plan in the marketplace and from those who oppose letting the government compete with commercial insurers.

But policy experts say few lawmakers have yet paid enough attention to what that new marketplace should look like — and whether it would actually work as promised.

http://www.nytimes.com/2009/10/06/business/06exchange.html?th&emc=th

[supernova]

1. Not if they don't put curbs on ins cos.

To continue the metaphor, I can look at Travelocity all day, and Orbitz, but in the end, I still can't afford a ticket to London.

Having a place to look everything up in one place doesn't guarantee I'll be able to purchase any of the options offered.

[dflprincess]

2. But you will be mandated to purchase one of the "options"

perhaps a cheaper one with high deductibles and copays and maybe just catastrophic coverage. You'll have insurance, but you still won't be able to get care.

[supernova]

4. That's why the public option is important

It would be there to set a minimum standard of care: no lifetime caps on care, no preexisting conditions, no being dropped for being sick, well-person care (perhaps even subsidies for health club memberships).

[dflprincess]

6. The public option proposed in HR3200 allows for premiums up to

11% of your income plus annual out of pockets up to $5k for a single and $10K for a family (in addition to anything else not covered by your policy). The public option will not necessarily be affordable nor will you be guaranteed care with those kinds of out of pocket expenses.

[bain_sidhe]

3. Depends on the requirements for being included

As with everything, the devil's in the details. With a strong set of requirements in order for a policy to be included on the exchange, it could work very well. Without that, it will be, as one wit put it, a glorified yellow pages for insurance policies.

The kind of requirements that would be needed (IMHO) are, at minimum:

- No caps on benefits, lifetime or yearly.

- Covers all "reasonable and customary treatments" AS DEFINED BY an independent, outside board, not the insurance company's "death panels."

- Covers both routine care with less than 20% co-pays, and major catastrophic care with no or an even lower co-pay.

- No exclusions of pre-existing conditions, and no higher prices for pre-existing conditions.

- No refusals permitted.

- Minimum premium differential for age (the 5x differential allowed by Baucus's bill is a travesty, IMHO.

- A cap on how much "overhead" can be taken out of premiums. Or, put another way, a floor on what percentage of premium income has to go to actual delivery of health care, I'd hope for no less than 90%, but I'd expect more like 85%

Probably should have some limits on how much premiums can increase every year, too.

[supernova]

5. These would be a good start.

:-)