A recent Denver Post article by Michael Booth highlights some of the logistical challenges facing the new health insurance marketplaces that will open for business in the fall. One major issue is the sheer volume of expected applicants – how will the marketplace go about assisting all of them? And – possibly a more significant problem – what if the actual volume falls far short of anticipated volume, the way it did with the pre-existing condition high risk pools that were created by the ACA?
Booth’s article notes that “Sen. Kevin Lundberg, R-Berthoud, said he did not see the exchange offering anything different than private comparison websites already provide.” As the marketplaces were being explained in the early days of the ACA, I was struck by the similarities to the service we’ve been providing to our Colorado clients for the last decade (we took Insurance Shoppers online in 2003).
There are a couple notable differences however: First, and probably most importantly, the ACA-created health insurance marketplaces will be the only venue for getting subsidies to help pay for the cost of health insurance for those earning less than 400% of FPL. And second, not all states have robust individual health insurance markets like Colorado does. In those states, the new marketplaces will likely be significantly better than the currently-available resources for comparing and purchasing individual health insurance policies.
In Colorado, we have hundreds of individual health insurance policies on the market, from almost all of the big-name national carriers as well as big name local carriers like Rocky Mountain Health Plans. And there are quite a few well-established local brokers who have worked to make their websites into user-friendly venues for comparing and buying health insurance. Of course, there are also “big box” style health insurance comparison sites that allow users to compare health insurance options (and those are available almost everywhere), but perhaps without the same level of personal, individualized service that you’d get from a local broker.
Colorado has also gotten a jump start on healthcare reform in general: For the past two years, all individual policies sold in Colorado have included maternity coverage and no differences in pricing based on gender. These are changes that will only come in a lot of states next January, once the ACA is more fully implemented.
So although I agree with Senator Lundberg when it comes to what’s available in Colorado, I don’t think we can necessarily extend that generalization to all states. And the subsidies (only available in the health insurance marketplaces, aka exchanges) have to be taken into consideration too, since those are the overwhelming “carrot” that officials are hoping to use to entice millions of currently uninsured middle-income Americans onto the health insurance rosters. In a state like Colorado, we probably could have done just fine by adding subsidies to our current system. We already had a solid high risk pool (not all states did) and we’ve already been making progress in terms of general reform and access to care. So the changes brought by the introduction of the ACA and the health insurance marketplace in Colorado might not be as significant as they will be in other states. That perspective – as well as the idea that we’re all in this together as a country rather than a bunch of isolated states – is helpful in terms of understanding “why all the fuss” about setting up marketplaces that might seem to duplicate a lot of existing services. In some places, yes. In others, definitely not.