Getting in Some Practice With Private Insurance Exchanges

John Marcille

I don’t know about you, but I’m starting to be overwhelmed by the complexities of the Affordable Care Act, and that’s just the parts of it that interest me. One of those parts is the mandate for health plan purchasing exchanges in the states.

All I can say is that I would not like to be the health plan executive who is responsible for creating the offerings that will to some degree determine that company’s success over the next few years. With millions of new members from the rolls of the uninsured up for grabs, and the possibility that small and large businesses may dump employees into the exchanges, the importance of having attractive products cannot be overstated.

But designing and pricing those plans is going to be a lot different for most companies than designing and pricing the plans that they sold to employers, and the ones they sold on the individual market. I doubt that employees who had employer-sponsored insurance will be eager to do a lot of comparison shopping, and they will be frustrated in evaluating the plans in terms of their individual needs. And the health care companies themselves are looking at a new minefield of risk, where fear of adverse selection may push them to offer plans that offer them some protection, but may not be optimal for members.

These are a few of the problems that Joe Burns explores in his article on private exchanges — laboratories for health plans and employers to try to figure it all out before the exchanges start operating at the beginning of 2014, or so the ACA specifies.

Meanwhile, we have a Supreme Court ruling upholding most of the ACA, yet some states are refusing to participate, opening the door for federally operated exchanges in those states. As much as some governors and legislators might hate the law, do they really want the feds controlling the exchanges? But maybe the insurers in those states might welcome a more consistent regulation.

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