Health Insurance is inaccessible to many Americans because
of cost or previous medical history. As a result, many health reform proposals
would create a new health insurance marketplace or "exchange" that would ensure
that health coverage is accessible and affordable for all.
How would such an exchange be organized? Who would it serve?
How would it be governed? What roles would insurers, employers, consumers, and
governments play in the new marketplace?
To answer these questions, the New America's Health Policy Program
gathered experts on this issue for a policy forum,
moderated by Julie Barnes, Deputy Director of the Health Policy Program at New
Rick Curtis, president of the Institute
for Health Policy Solutions, began the discussion by laying out the goals
and purposes of an exchange. He said that the basic purpose of an exchange was
to organize the health insurance market so people can get access to coverage
and make an informed choice, without having to deal with all of the
complexities and rules of today's
system. Curtis said that an exchange should not be governed by people who also
managed plans in the market to avoid a conflict of interest. The ultimate goal
of an exchange, he said, was to maximize the amount of competition and choice
among plans based on value and cost effectiveness while minimizing competition
based on risk selection--as is often the case in today's
DeAnn Friedholm of Consumers Union
followed Curtis with a discussion of the current insurance market from the
perspective of individual consumers. Noting how overwhelming the individual
market for insurance can be, she argued the goal of an exchange should be to
provide consumers with "structured choice" and reduce "frivolous
variation" between health plans that provided no added value. Friedholm
had several suggestions on how to reach this goal:
definition of plan terms:Terms like "medical necessity" should mean
the same thing regardless of what insurance you have.
standardized benefit plans:Friedholm offered the Massachusetts reform efforts as an
example of how a new marketplace could create better choices for consumers
without becoming overly restrictive in terms of what benefits and plans
about plans must be publicly available: Again, the Massachusetts reform provided a good
example of what efforts could be taken to better inform consumers.
information should be published in a format that's easier to understand:
Friedholm suggested a sort of "nutrition label" could be created
that would provide consumers with vital information--premiums, deductibles,
co-pays, maybe even expected out-of-pocket costs for certain illness.
disclosure rules to prohibit bad, limited plans: Right now, Friedholm
argued too many plans have so many loopholes and exclusions that it makes
it impossible for consumers to make an informed choice.
Sara Horowitz, is the executive director of the Freelancers Union, an organization
which represents over 100,000 independent workers. She spoke about the need for
a new insurance marketplace that could provide continuous, stable coverage for
workers who move frequently from job to job. Horowitz emphasized the role that
associations like hers could play as "trusted advisors," helping
their members navigate an exchange. Currently, the Freelancers Union operates
like a mini-exchange offering health insurance plans to its membership of
independent and self-employed workers.
Helen Darling is the president of the National Business Group on Health
an organization of large employers that provides 55 million individuals
with health benefits. Darling asserted that one thing that was absolutely
essential to making an exchange work was an individual requirement to purchase
insurance. Darling made clear, however, that if you were going to require
individuals to purchase insurance, you must make sure it is affordable,
understandable and delivers the highest value care. She suggested an exchange
might be built on a combination of state and regional options, operating in a
federal framework. National standards or rules would be necessary so that large
employers would not be trying to comply with 50 different sets of regulations.
However, Alissa Fox, a senior vice president at the Blue
Cross Blue Shield Association, argued that if some type of organization was
needed to help organize the insurance market, it should build on existing state
infrastructure to prevent overlap and duplication that raise costs. She agreed
with Darling that for insurance markets to work all individuals must
participate, but said that simply creating bigger risk pools wouldn't necessarily lead to savings unless reformers
specifically address the problems of cost.
Finally, Len Nichols, the director of New America's Health Policy Program,
addressed the question of whether private health plans should be forced to
compete with a "public" health insurance option. Nichols described
the debate over the public plan option as follows:
Proponents of a public plan support the idea for a variety
of reasons. Some see it as a backdoor to a single-payer health care system.
Others question the financial incentives of managers in private plans to deny
care. Still others see the purchasing power of a public plan as a way to set
prices and control health care costs.
Opponents of the public plan worry it will lead to
single-payer health care. Others are concerned that because it is essential for
most providers to participate in Medicare for financial reasons, the public
plan could capitalize on this and force providers to concede lower rates by
leveraging their participation in Medicare. As a result, providers would shift
costs to other private payers to make up for the underpayments by the public
Finally, as Nichols noted, there are some who are
philosophically opposed to the expansion of government, but that was more a
question of ideology than policy.
The solution, Nichols suggested, was a public plan based on
rules of the insurance marketplace (or exchange) apply to all plans, and
governance structure is designed to isolate the public plan from unfair
advantages and perverse incentives
The goal was to create a public plan that satisfied the
concerns of both sides. However, as Nichols noted, more must be done to control
costs by building an information system through which best practice information
can flow and by incentivizing payments so we pay people for doing the right
thing and not just doing more of something.