Updated: Exchanges Have Potential to Transform Health Plan Shopping

Health insurance exchanges, as envisioned in the Patient Protection and Affordable Care Act (ACA), have the potential to help deliver more affordable health insurance, greater cost transparency and expanded access.  Modeled somewhat after the federal employee health benefits plan (FEHBP), state exchanges are envisioned as being a one stop shop for individuals and/or small businesses purchasing health coverage.  (ACA allows states to combine or separate individual and small business buyers.) In a New England Journal of Medicine article, Jon Kingsdale, an employee of the Commonwealth Health Insurance Connector Authority in Boston writes that if implemented appropriately, the exchanges can make competition work for consumers.  Well designed and managed exchanges should help simplify the process of researching and shopping for a health plan.

However, there are many steps along the path to well designed exchanges and hundreds, if not thousands, of technical decisions that state officials will need to make in order to establish these state exchanges. As Joanne Kenen highlights in her recent post on the New America Foundation’s “New Health Dialogue” Blog, which was based on her conversations with Kingsdale and John Bertko, a visiting scholar at the Brookings Institution, it is possible that states could make wrong decisions regarding the best way to run their state exchanges, which could ultimately impact the overall operation and impact of the state exchanges.

Click here to read Kingsdale’s discussion of state insurance exchanges.

Click here to read Kenen’s comments on the potential hazards associated with exchange implementation.