Now What? A Look at the Development of Health Exchanges

By Jennifer S. Bard

One of the most common questions I get asked when I talk about health care reform is some version of “how is it actually going to work?” Good question.  So much of the Bill was TBA while its Constitutionality was being tested that only now does it seem as if the both the insurance industry and the government are realizing that it is up to them to make this work.

For example, what, exactly is an Exchange?  There’s surprisingly little information—and all of in the future tense.  For example, the Kaiser Family Foundation website gives this definition: “Exchanges are new organizations that will be set up to create a more organized and competitive market for buying health insurance.” This is how the Government is explaining it.

But there are still a lot of missing pieces.  Who decides the criteria for participation? How will “affordable” be defined? Because the issue isn’t just price—it’s what’s included in that price.   We know that “Exchange” is essentially a web shopping site where people can go to study and compare different health insurance packages.   The difference is that at least some of these packages will be “affordable” and there will always be some kind of “affordable” option for everyone regardless of their current health status.  Beyond that, there are a lot of questions.  Some states are working hard to set up exchanges, others have refused to participate and still others are still in some kind of “planning” or “study” phase.  This map from the Kaiser Foundation gives a 50 state overview.  As the idea of exchanges and the actual implementation of the mandate which will be the mechanism that requires consumers to use these exchanges, there is a growing awareness on the part of the government agencies responsible for running this that it will be a lot of work. For example, this article from Business Week reports concerns expressed by the Commissioner of IRS about how they are actually going to enforce the penalties. There’s already a considerable amount of hiring going in.

I did some looking around the web and her are some examples of the kinds of things which may be on an Exchange.  Here’s a fun, interactive infographic from Cigna that purports to provide customized information for consumers about how ACA will affect them.  It doesn’t have much information at the moment, but it’s an example of what consumers might find when they go on exchanges.  Here’s a more substantive piece by Aetna reviewing what it thinks are going to be important features of successful exchanges.

[cross-posted from HealthLawProf Blog]

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