Health care exchanges should promote competition, choices.
By Cindy Zeldin
Earlier this month, Gov. Nathan Deal signed an executive order creating the Georgia Health Insurance Exchange Advisory Committee, which is charged with determining whether Georgia should establish a state-based health exchange.
If well crafted, a Georgia insurance exchange has the potential to increase transparency, present clear and meaningful choices, and promote better value for consumers who don’t have access to a health plan at work.
The Affordable Care Act authorized state-level health insurance exchanges, providing a basic framework and initial funding. By 2014, each state’s exchange must be able to enroll individuals and small businesses into health insurance plans and certify that plans meet certain requirements, such as an adequate provider network and an essential benefits package. Within this framework, Georgia has considerable flexibility to fashion a structure that best meets our state’s individual needs.
In Georgia today, just over half of us get health insurance through a workplace plan. This arrangement has persisted because large companies can easily pool health risks and typically have human resources departments that can bargain with insurance companies. Health insurance purchased through the workplace is not taxed, and employers typically contribute a hefty portion of the cost. The individual health insurance market boasts none of these benefits.
In fact, for Georgians without the option of a workplace health plan, navigating the health system can be a minefield. Thus, a well functioning exchange should replicate the best of what works for employment-based health insurance: Pool risk, leverage enrollee volume to drive bargains with insurance companies and administer tax credits that can help level the playing field with those pre-tax workplace plans.
We should focus on three core goals: Provide structured choices that supply the information and tools to facilitate optimal purchasing decisions for consumers; create incentives for insurance companies to compete based on value rather than by cherry picking the healthiest applicants; and serve as an easy-to-use, one-stop-shop and provide navigation assistance to programs like Medicaid and PeachCare for Kids where appropriate.
First, the exchange will work best for consumers when choices are presented that draw their attention to the features of the plan that truly matter. Without the right information, a dizzying array of plan options with no rhyme or reason is not helpful. With the right information, structured choices are empowering. Consumers might want to know what a common procedure would cost after factoring in deductibles and co-pays, for example.
Second, the flip side of consumer choice is insurer competition. The exchange should promote value as the locus of competition by providing clear information about price and quality, such as the percentage of consumers’ premium dollars that are being spent on medical care so the consumer can determine if that insurance company is worth their business.
There should also be a concerted effort to limit the ability of insurers to market stripped-down plans outside the exchange to the youngest and healthiest consumers, which could threaten the strength and viability of the exchange and raise prices for consumers purchasing through the exchange.
Third, because more than half of Georgia’s uninsured population will be eligible for the Medicaid program when it is expanded in 2014, the exchange must be able to enroll these individuals into this program, requiring coordination between the exchange authority and our state’s Department of Community Health.
Cindy Zeldin is the executive director of Georgians for a Healthy Future and was recently appointed to the Georgia Health Insurance Exchange Advisory Committee.
Framework should be flexible and suit state’s individual needs.
By Graham Thompson
It’s no secret that the Affordable Care Act’s overhaul of the American health care system stirred strong emotions and put health care policy at the forefront. Across the country, Americans of different backgrounds and political affiliations have expressed strongly held opinions over the act’s approach to solving our health care challenges — many of which revolve around the issue of cost. Georgia has joined a lawsuit with 25 other states under the assertion that this new law by virtue of its mandated purchase of health insurance is unconstitutional.
While the vigorous debate over constitutionality continues there is no certainty about the outcome and the law, whatever people may think of it, is the law of the land. As such, most states are preparing for enactment with implementation efforts that will meet key timelines.
The ACA allows every state the option of establishing its own unique Health Insurance Exchange (HIE) to provide additional avenues for access and coverage to individuals and small businesses. While the new law sets specific guidelines by which exchanges must be established, states are given discretion and flexibility when designing them in recognition of the fact that each state is its own market (or multiple set of markets as defined by local geographies) and may want to tailor a solution to fit the local need or needs rather than rely on a generically prescribed approach dictated, and run, by the federal government.
During Georgia’s 2011 legislative session, a thoughtful and forward-looking legislative effort driven by Gov. Nathan Deal to take the next sensible step in planning an exchange was thwarted. The ACA provides if states have not demonstrated significant efforts to establish an exchange by the end of 2012 then Washington regulators will come to Georgia and establish one.
Why wouldn’t Georgia’s political and business leaders not at least plan for our a local solution tailored to the unique needs of Georgia’s citizens and small employers? The governor, and the many legislators who supported him, understood this and attempted to be proactive so that if the lawsuit does not alter or overturn the existing law then our state would have its own “Plan B” ready to go.
To maintain local control and choice, we must take action now. As other states press forward to establish their own HIE model, we are learning lessons about what may or may not work for our state. The goal should be to empower Georgia businesses and citizens with meaningful options via an open approach offering choice, flexibility and affordability.
Some political factions have advocated we do nothing because of the lawsuit and wanting to make a stand based solely on their principles. But Gov. Deal, who has an understanding of how the federal government and Congress operate, is being the pragmatist by fighting the fight but also preparing for another possible outcome. Punting for the sake of ideology is not in our interests because if we show up unprepared in 18 months, policy choices will be made for us under a federally run program as we forfeit any local control. And that’s probably a bad outcome for all of Georgia — whether you like the new law or not.
We should take advantage of this flexibility we are being offered and thoughtfully move forward as Gov. Deal has suggested to prepare for creating an exchange that will take into consideration the unique needs of its citizens and business community.
Graham Thompson is the executive director of the Georgia Association of Health Plans, representing Georgia’s major health insurance providers.
