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Health Insurance Exchanges in the Picture for Reform?
Tuesday, August 4, 2009
Many have tried and failed in this area, due to members going outside and negotiating their own agreements if they had a group that didn’t have as many high risk individuals. That does somewhat defeat the purpose but in part this is what Massachusetts has done. To cover everyone it’s down to biting the bullet and giving everyone coverage, low and high risk, as those who are high risk pay premiums too, their expenses are more than others, but again that’s what insurance is all about, spreading the cost over a large population so nobody is hit hard individually with cost. As long as cherry picking continues and groups are defined based on expenses, its’ hard to make a winner here and California had just that situation occur. BD
As Congress debates creating insurance "exchanges" as part of a health-care overhaul, the failure of a similar effort in California may offer important insights, former participants in the program say.
From 1993 to 2006, small businesses in California could buy health insurance through an exchange run initially by the government, and later by a nonprofit group.
The plan was undermined when some businesses with relatively healthy workers bought policies more cheaply directly from insurers, bypassing the exchange. That left the exchange with a shrinking pool of less-healthy workers, forcing rates higher and prompting many insurers to withdraw. Managers chose to shut the program in 2006 when one of three remaining insurers withdrew.
Among those lessons, he and others said: Employers and individuals who qualify must be required to obtain health insurance through the exchange. Failing that, John Grgurina, who ran California's exchange from 2002 until it ended, said government must impose rules governing rates and eligibility to protect the exchange from attracting a disproportionate share of high-risk people.
Massachusetts and Connecticut have had more success. Massachusetts created an exchange as part of its universal-health-care effort; the exchange has helped expand coverage, although some business owners have balked at the costs, and state officials have worried about the impact on the state budget.
1 comments:
Being a Utah health insurance underwriter for www.BenefitsManager.net and www.DentalInsuranceUtah.net I have the opportunity to consult within many state insurance committee meetings. Some interesting changes took place in Utah with the passage of House Bill 188 that other states should pay attention to and perhaps the federal legislation. The bill created a state insurance pool requiring private health insurance carriers to come together and underwrite risk. Through governmental guidelines (which I have traditionally opposed in the past) they created a arena of underwriting rules that essentially guarantees the participating insurance carriers a ?no loss? or ?no gain? over each other. What this essentially means is that they pool the underwriting medical risk and spread it evenly among each carrier. All the sudden, we see guaranteed issued policies. We see rates drop by as much as 13% In Utah, our average monthly family rate is $867 for a $500 deductible plan. Some of the family rates within the ?Utah Insurance Exchange Portal? are approaching $700.00 now. To see more of HB 188 and see how Utah wrangled change without increasing taxes or rationing go to: http://www.prweb.com/releases/utah_health_insurance/health_care_reform/prweb2614544.htm
The private insurance sector can be corralled into cooperation where they can meet their goals. You have to understand that health insurance carriers are only looking for a 4-5% administration fee. That is it and they are more efficient as compared to a governmental portal that will cost more money. Take a look at Utah folks!
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