• Setting Up Exchanges

    The Economist noting that the clock is ticking toward the time when states will be required to have operational health insurance exchanges (market places) in which consumers can shop for and purchase insurance. Or if states do not set one up, then the federal government will do so. There are a host of practical questions that states must answer as the Economist notes:

    Who should govern the exchange? Should they join a multi-state exchange? How should states facilitate enrolment, as required by law? What sort of people will buy insurance on the exchange? How should the exchange be structured to serve them?

    And states are waiting on final rules about benefit packages from the federal government and many want clarity on existing rules. Lots of details. However, what caught my eye was this:

    PricewaterhouseCoopers, a consultancy, estimates that 97% of those enrolled in exchanges will be buying insurance for the first time.

    That is the point, you might correctly say. However, for all the bluster about the heavy hand of government, the most radical and untested aspect of the ACA is that individuals will shop for their own health insurance, with CBO estimating that 24 Million persons will purchase coverage in exchanges by 2019. In 2010, there were only 14 Million persons with individually purchased health insurance policies nationally according to Kaiser, so the implementation of the ACA will bring about a huge increase in those buying their own coverage (with income based premium support, of course). By comparison, there are now 155-160 Million covered by employer sponsored coverage, and around 110 Million covered by Medicare and Medicaid.

    It is important to realize how little we know about how good consumers will be at buying their own health insurance.  That the number of individuals doing so will nearly double in eight years time is the most radical departure from the status quo in the ACA.

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