Even as the new health care law heads for the U.S. Supreme Court, where it faces an uncertain future, Washington state is moving forward with its $23 million effort to design and implement a health care exchange.
State health care exchanges, mandated by the federal law, must be in place by 2014. They were billed as a way to promote competition and provide access to subsidies for qualified consumers.
While each state is supposed to design its own health care exchange, exchanges seem to fall into two categories: open market and active purchaser.
Open-market exchanges are like a virtual marketplace where all insurers in the state compete side by side, allowing consumers to select from a broad variety of plans, coverage levels and prices. The emphasis is on competition and maximum consumer choice. The American Medical Association recently endorsed this model of health exchange.
In active-purchaser exchanges, the state plays a much bigger role, determining which insurers can participate in the exchange, what coverage they can offer and what they can charge. Supporters argue that, while this model may offer people fewer choices, they are higher-quality options.
Wisconsin, for example, has adopted an open-market model. The state’s prototype health exchange website features interactive tools that allow individuals and small employers to provide details about their situation and health care needs, view information on premium costs, services and provider networks for a variety of health plans, then rank those plans based on personal preferences. If they find a plan they like, they can enroll online. By providing additional information, consumers can also find out if they qualify for federal subsidies to help pay their health insurance premiums.
What type of health care exchange will Washington state have? That remains to be seen.
Our state’s Health Care Authority is tasked with designing our exchange, which must be approved by the Legislature. The decisions they make will either protect choice and preserve the private insurance market in our state or reduce choice and put private insurers out of business.
How it should look
For example, if they limit the insurance carriers that can participate in the exchange, that will restrict choice. If they limit the types of health plans those companies can offer, that will restrict choice. If they compel insurers to participate in the exchange as a condition of operating in Washington state, that will restrict choice.
These are all options under consideration.
Instead, the Health Care Authority should structure our health care exchange to provide maximum choice and opportunity for Washington consumers.
What would that look like?
• It would be an Internet portal where consumers could choose among all available options, rather than those few approved by state bureaucrats.
• It would allow all insurers offering plans that qualify under the federal health care law to participate in the exchange, using market-driven rates rather than state-negotiated or state-mandated rates.
• It would maintain a robust individual and small group market outside the exchange and ensure that no additional responsibilities could be imposed on health insurers or health plans based solely on their participation in the exchange.
American consumers are already experts at e-commerce, using the Internet to compare quality and prices on all sorts of products with the help of online reviews posted by individuals and rating organizations. In fact, the U.S. Census reports that Americans spent more than $1 trillion on e-commerce purchases from 2000 to 2010.
What can you do to make your voice heard? Send your comments and suggestions to the Health Care Authority in Olympia and tell your state legislator what you want our health care exchange to look like.
This is all about choice. The only question is, whose choice will it be — theirs or yours?
Don Brunell is president of the Association of Washington Business, Washington state’s chamber of commerce. Visit http://www.awb.org.