Monday, April 29, 2013

HCR -- About Those Insurance Exchanges

I heard a TV talk show host gleefully rattling on one day last week about what he called the Obamacare train wreck, making fun of the complexities of the insurance exchanges because the rules and details were so complicated nobody seems to understand them.

Maggie Mahar's post below points out that consumers will not be tossed into the mix without help. There will be ombudsmen to help them, or as they are being tagged "Navigators." She points out quite sensibly that it is in the interest of the insurance industry to see to it that consumers know and understand what is happening with health insurance, otherwise those failing to do so will not remain competitive.

Anyone who has studied the mouseprint on a standard insurance policy -- not just health insurance, but just about any kind of insurance, from liability to life insurance -- already knows that they are the most complicated documents ever crafted. There is no way that "navigating" any insurance policy is an easy task. The exchanges are being put into place for exactly that reason.

Medicare supplemental plans (also called the alphabet plans) have been standardized for years. The exchanges will do the same ranking of standards for health insurance. In other words, thanks to ACA the rest of the country will finally be able to compare levels of insurance coverage in the same way that Medicare beneficiaries have been doing for years, confident that some hidden charges or fine print will not be used by the insurance company to manipulate coverage in an unexpected way.

Here is a link to Health Insurance 101

  •  The exchanges are NOT insurance plans. 
  • They are definitions of insurance plans. 
  • They spell out what will or will not be covered by plans called bronze, silver, gold and platinum.

Navigators: The Folks Who Will Help You Surf the New Insurance Exchanges
Over at, I’ve addressed some “frequently asked questions” about the “navigators” who will help individuals and small business find the coverage they want in the new Exchanges. 
– Who Will Become Navigators?
– Can Insurance Agents and Brokers Apply to Be Navigators? (Wouldn’t that create a conflict of interest?)
– Just How Will Navigators Help People Sort Out Their Options in the Exchanges?
– How Much Training Will They Receive?
–Finally, many people worry that the “navigators” just won’t be able to handle the heavy traffic. Giving the American public the information it will need about Obamacare is an enormous task. Will these navigators be up to it? 
The answer to that last question is that the navigators will have help. Patient advocacy groups, the states, and county health agencies will pitch in. The federal government also is launching a marketing program, “Enroll America” that will urge mothers to nag their uninsured 20-something and 30-something sons. (Seriously– and I expect that in many cases, this will be effective.) 
Meanwhile insurers will be eager to draw young, healthy customers into the Exchanges. This means that they will invest in marketing campaigns designed to let 20-somethings and 30-somethings know that the vast majority will be eligible for generous government subsidies.
Just one example: Blue Cross and Blue Shield of Illinois already has launched a “Be Covered Illinois” campaign. The campaign is being funded by the insurer, and carried out by various community groups:

Keep in mind that if insurers mislead customers about their offerings, those customers will have an opportunity to pick a different plan a year later. And under the ACA, they will have “navigators” to help them make a better choice. 
Insurers know this. They also are well aware that under the new ACA rules that regulate them, a health insurance company will have to draw—and keep—a large share of the market’s customers in order to survive financially. For that reason, I suspect that savvy insurers will make a major effort to provide information about specific plans that will attract customers who will want to stick with those plans. 
For my answers to the first four questions above, go to Health, click on the question and the answer will pop up.


I must add a couple more comments. 
  • PPACA is not insurance. It is a package of rules and standards that define insurance. 
  • This legislation was crafted by a multitude of Congressional staff guided by lobbies representing private companies and interests -- drugs, insurance, medical devices, durable equipment, professional associations, etc.  The list is endless. 
  • The concept of exchanges has been around for years. Insurance professionals and academic types who specialize in these matters are seeing the concept put into practice for the first time but it is a very old idea. 
  • The name of economist Alain Enthoven has been associated with the concept of exchanges for years. The idea is also tagged "managed competition" and is at the heart of many Conservative ideas (including Paul Ryan's). 
  • Those who speak of "government insurance" and "government health care" revealing embarrassing ignorance. The government is not in the insurance business. But it is correct to speak of government health care because the Veterans Administration, military medical corps, as well as state and community clinics all over the country are, in fact, government health care. Unfortunately, those who speak of PPACA as government health care simply have no idea what they are talking about. 

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