Wednesday, March 2, 2011

Setting Up Exchanges

The Affordable Care Act (ACA) contains one truly radical notion: individuals will shop for their own health insurance. That is a rare event in the U.S. now, with only 14 Million or so persons seeking a quote, going through underwriting, being approved, and paying premiums. Around 110-15 Million folks have government provided insurance (Medicare, Medicaid, VA, etc.) and about 160 Million people have employer based insurance. The remainder are uninsured.

The ACA tells states that they must set up an insurance marketplace (called exchanges) in which individuals who are otherwise insured and small businesses may shop for policies. States have broad discretion in setting up these exchanges, including the makeup of a board to guide the development of the exchange and its policies.

The Raleigh, (N.C.) News and Observer this morning has a story about an emerging dispute about who will have seats on the board that governs the creation of exchanges in N.C. At issue is who will be represented on the board. A current bill under consideration in the N.C. General Assembly would grant a seat to Blue Cross/Blue Shield of N.C., the dominant insurer in that state; seats for two other insurers; representatives from the business community; the State Medical Society; and the hospital Association. What is missing are consumer advocates, say critics.

I agree a consumer voice on such a board is important, but think that some other types of voices are also needed, notably:
  • health policy type(s) from the large research community, both university based and otherwise that exist in our state;
  • experts in communication of complex information. More than marketing is needed, but insight into how information on plan design is communicated to help people make their choice of plan. I am a health policy guy and my wife is a nurse, and we still often puzzle over the materials that Duke provides to help us decide what plan to pick. Communication of plan design, premiums and deductibles in a way that stands up to people then living their lives is crucial for success of any private-insurance based reform.
In the discussion of this issue there are hints of bad intentions and bad faith. I don't have any insight into anyone's motivations. But, the composition of the board to set up the most consequential health policy innovation in North Carolina in quite a long time needs to be broader than is currently being discussed. Both the makeup of the board, and all that they do needs to keep in mind that last step required for any reform based on private insurance to work is a consumer picking their own insurance plan. And remember that very few people do that today.

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