The Unofficial Health Exchange Resource Site

U.S. Health Insurance Status (Under 65) (Photo credit: Wikipedia)

 Next month, the Supreme Court is expected to hand down its ruling on the individual mandate contained in the Patient Protection and Affordable Care Act.  One thing the ruling will not significantly alter the development of state-run or Private health insurance exchanges. That’s because regardless of the individual mandate, employers and individuals will still be looking for a vehicle that provides affordable health insurance that meets their needs.

1.       Employers participating in a public or private exchange should be able to control cost and stream line administration.  This could come in the form of deferred contribution of the employer setting one contribution amount for all employees. Then the employee should be able to choose the best plan for their needs.
2.      All state or federal exchanges will offer multiple carries and multiple plans at various benefit levels and price points. Among these options will be platinum, gold, silver and bronze plan types that are designed to provide a wide range of benefits for individuals and families.  This strategy is supposed to make it easier for the insured to choose the best option. 
3.      PPACA guarantees that health insurance plans offered in the individual and small group markets include a comprehensive package of services known as “essential health benefits” (EHB). These benefits must cover preventive, diagnostic and therapeutic services in at least ten categories of care. Each state has been given the responsibility of developing, their own essential benefits.  The exchange plans would have essential benefits as a common core of each plan design.
4.       Exchanges will be sold directly through brokers. It will continue to be advantageous for employers to purchase their health insurance coverage through a trusted, licensed and qualified broker. In fact, the broker’s expertise and knowledge will be more important than ever in providing the information to the benefit managers to make well-informed decisions.
5.        Health insurance exchanges can work either private or state funded. It will depend on participation. If an Exchange has a strong balance of members then there is a chance for success. If the exchange is not competitive then the adverse selection will occur.  If the state exchanges are truly set up in the spirit of a free market place they have a chance. 

Time will tell if the state based exchange can live up to the hype.  There are a lot of different issues that will have to be solved in a very short time period. The insurance industry is already working on private exchange models. They will be ready to launch with the state or compete against them.

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