Health-insurance exchanges begin to take form

One of the biggest question marks regarding full implementation of the federal health law in 2014 centers around what state health-insurance exchanges will look like. The Affordable Care Act mandates them, but leaves who will run them–and who will participate–largely up to the states.

Everyone from insurance companies to doctors to consumers has a stake in how these online insurance marketplaces will shape up; many are keeping close tabs on the planning process.

Small-business owner Kelly Conklin is one person watching closely. He said it irritates him when politicians talk about shopping for insurance.

“Really, I shop for socks,” Conklin said. “I go to the store, look for the least expensive pair, and I hope they do all the things socks are supposed to do.”

If he wears a hole in them, he knows he made a bad choice.

“But I’m not sure that’s how we want to buy health insurance,” Conklin said. “I think that’s a very bad model.”

That’s the reason Conklin was at a health-insurance forum in Trenton Wednesday, pushing for exchanges to establish minimum standards for co-pays and deductibles on top of existing regulations.

“I think if these exchanges are going to be a success, they have to be credible,” Conklin said. “And if all they are is another place to shop for an insurance plan, then that’s not credible.”

This is a key point of debate in New Jersey–and in many other states. Should exchanges be clearinghouses, basically an Expedia.com for health insurance, or should a regulator be able to impose standards on top of current regulations?

Willingboro, N.J., pediatrician Odette Cohen said she, too, wants more regulation, partly to increase payments from insurance companies to solo practitioners.

“The people that are in charge of the exchange should not let in insurance companies that are not reimbursing providers adequately,” Cohen said.

According to a Rutgers University survey, most insurers favor allowing any plan that meets state regulations into the exchanges. Industry representatives have said more regulation will drive providers out of the market. They argue decreased competition will hamstring exchanges, and won’t drive down premiums.

The federal health law mandates exchanges to be in place in each state by 2014. According to Dave Chandra, an analyst at the Center on Budget and Policy Priorities, 10 states have passed laws giving themselves authority to run exchanges. One state, Louisiana, does not plan to run its own exchange, which means the authority would fall to the federal government.

Bills have been introduced in both the Pennsylvania and New Jersey legislatures that propose frameworks for exchanges. According to Chandra, Delaware is considering a non-legislative route, perhaps through executive order.