"Reviving the Economy"-Health Insurance Exchange
Friday, June 05, 2009PAUL KANGAS: Next week, lawmakers on Capitol Hill are expected to roll out proposals to overhaul the country's health care system. President Obama wants to hold down costs and provide health coverage for 50 million uninsured Americans. To help make that happen, one idea in the works is what's called a health insurance exchange. In tonight's installment of "Reviving the Economy," Dana Bate explains what that exchange might look like and how it would work.
DANA BATE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Whether it's shopping on eBay or searching for a phone plan, Americans love a good deal. But if you decided to shop around for a health care plan today, chances are it wouldn't be easy. Health economist Linda Blumberg says that's because the health insurance market is broken.
LINDA BLUMBERG, HEALTH ECONOMIST, URBAN INSTITUTE: It's kind of the wild, wild west out there, particularly in the non-group insurance market, but also in the small group market and people who are making purchasing decisions don't have the information they need to make good choices.
BATE: That's why she and many others in the health care community want to bring a sheriff to town in the form of a health insurance exchange. The idea is to create one-stop shopping for health insurance. Consumers could go to this insurance marketplace, compare local plans, find out what government aid is available and figure out which plans are best. Former Medicare director Mark McClellan says an exchange would spread risk across plans so that it's easier and cheaper to insure more people.
MARK MCCLELLAN, DIR., HEALTH CARE REFORM, BROOKINGS: So the idea is to try to set up a system in which people could have guaranteed access to coverage that they can afford, that doesn't necessarily charge them more just because they have existing health problems.
BATE: So who would be eligible to use this exchange? That's for Congress to decide. But to start, the exchange would probably focus on small businesses and individuals who can't get insurance through their employer. How much the government will regulate the exchange is also a question.
MCCLELLAN: On the one hand, you want to try to give people clear, comparable choices, so anything that you can do to simplify the range of choices and the number of choices can potentially help with that. On the other hand, the point of competition is to encourage people to be able to sign up for plans that do health care better.
BATE: Blumberg worries too little regulation could lump high risk people together, defeating the system's purpose.
BLUMBERG: The way that insurers behave is in their interest to have the lowest cost, lowest risk enrollees in their plans. The more that they can differentiate the plans that they're offering, the more they can attempt to attract individuals of different risk.
BATE: Lawmakers also need to decide who would run a health care exchange, whether there would be a single national marketplace or whether states would create their own. And, of course, there's the question of whether the government will offer its own health plan to compete with private insurers. Dana Bate, NIGHTLY BUSINESS REPORT, Washington.
