Monday, February 25, 2013

Opting in to Federally-Run Health Insurance Exchanges

New reports show that 26 states will not develop state-run health insurance exchanges, leaving the door open for the federal government to fill this void. Some states are ceding exchange responsibilities completely to the federal government, but many states are actively planning to run their own exchanges as a way to decrease the rolls of the un-insured and provide a credible, state-run solution to address health care disparities. While it is true that federal exchanges have their own set of hurdles, I submit a federal exchange system offer some advantages.

Several years ago, before the decision to allow states the ability to run exchanges was announced, some observers noted the allure of a single federal platform for exchanges.  The drawback to state-run exchanges is the complexity that results from up to 50 different sets of exchanges. A federally run exchanges can offer consistency across the country.  Further, non-discrimination rules and “minimum essential coverage” rules and standards can be more easily monitored in a federal exchange as compared to many models in state exchanges.

Employers with operations and employees in many states, and health plans as well, would appreciate a standard set of rules; for these organizations, navigating a single system may be the better option.

These decisions by states are not final – states annually have the option of starting an exchange, and a standard for exchanges could prove to be the “template” for newer models. We will all see how this develops, but I wouldn’t be surprised to see consolidation in these exchanges of the future, rather than re-inventing the wheel 50 times.

Michael Taylor, MD
Chief Medical Officer

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