What About the Insurance Exchanges?

Philip Betbeze, for HealthLeaders Media , May 13, 2013
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This article appears in the May issue of HealthLeaders magazine.

Revenue issues, of course, aren't limited to the Medicaid expansion. There is also the matter of the health insurance exchanges, which states have the option of either setting up on their own or allowing the federal government to do it for them. The exchanges are supposed to create an online marketplace of competing insurance plans that would allow comparison shopping for those who are seeking insurance and facilitate expansion of insurance coverage to more people.

Though many more people should be covered in an environment under which preexisting conditions cannot exclude people from purchasing insurance and lifetime maximums, among other disliked business practices in the individual insurance market, are banned, the cost-sharing component of such plans has not been determined with any degree of accuracy. Further, many speculate that businesses will begin to offload their insurance responsibilities onto the exchanges. Despite the penalties they would pay for doing so, cost certainty is worth a lot.

Though the federal government says it can and will roll out health insurance exchanges on time for each state that refuses to create its own, many are skeptical of the on-time promise. But even if they are set up on time, exchanges could bring other problems, chief among them, the cost-sharing component. 

"We are skeptical that all this is going to happen on time in 2014, although eventually it will happen," says Bruce Siegel of the National Association of Public Hospitals and Health Systems. "Even with the exchanges, some of the plans have pretty high patient cost sharing in that they only cover 60%. We expect that money to be bad debt."

Grady's John Haupert agrees, although he says at least initially, the exchanges will help secure more reliable reimbursement. "Exchanges will help, but for us, the Medicaid expansion is more substantial."

Second, a lot of uncertainty surrounds the exchanges. For instance, how many employers will drop their current coverage and send their employees on to the exchanges? How will people select their insurance through them? How much bad debt and charity care will be generated from the switch?

"These are complex questions, and a lot will rely on a variety of different responses from the states," says Siegel.

This article appears in the May issue of HealthLeaders magazine.

Philip Betbeze is senior leadership editor with HealthLeaders Media.




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