Health Insurance Markets

Thanks to David Kerrigan of the Massachusetts Health Connector for pointing out that the Obama Administration has suddenly switched terminology: health insurance exchanges are now health insurance marketplaces. I think it’s a great idea, which is why I wrote a blog post on this very topic on Friday. The Hill (Obama officials ditch ‘exchanges’ in rebranding of healthcare reform law) covers the story.

However, the Hill has a weird angle on this. The article heavily features an anti-ObamaCare activist, Dean Clancy who says:

“They could call them motherhood or apple pie, but it wouldn’t change our feelings about them… We’re encouraged that they’re showing signs of desperation. I think that it’s too late in the game to try to start calling this something different. And [we’re] not going to spend a lot of effort fighting over a word.”

Clancy’s website is called blockexchanges.com, so he may actually have more commitment to the word exchange than the Obama folks. Somehow blockmarketplaces.com just doesn’t have the same ring to it. (That domain is still available at this writing in case you want to grab it.) Blockexchanges also has some misleading information on its home page:

“Remember, without the state exchanges, ObamaCare cannot function.”

Actually, the federal government will step in if the states don’t.

Personally, I don’t sense desperation but rather a gradual wising up about what implementation will require. The term “marketplace” makes a good deal of sense for someone who is comparison shopping for health insurance. Here’s to more commonsense improvements as ObamaCare is rolled out.

David E. Williams is co-founder of MedPharma Partners LLC, strategy consultant in technology enabled health care services, pharma, biotech, and medical devices. Formerly with BCG and LEK. He writes regularly at Health Business Blog, where this post first appeared.

Share on Twitter

You may have received a refund check in the past few months from your health insurer. This is not your individual reward for staying healthy; it is your insurer’s punishment for making too much money because you did.

Obamacare includes what the health care technocracy calls the “MLR rule” – minimum requirements for medical-loss ratios – or the percentage of premiums collected by health insurers that must be spent on medical care or refunded. The inverse of the MLR is the percentage spent on administration and marketing, and earned as profit. Obamacare sets minimum MLRs of 80 percent for individual and small group plans, and 85 percent for large groups.

Aside from its obvious populist appeal, this profit regulation mechanism signifies a belief, now enshrined in legislation, that health insurance markets do not work. Without such a rule, the architects of Obamacare believe, insurers can name their prices, however inflated, and we all just pay.

In the short term, that is true. Most health insurance plans price only once per year, are subject to long delays in cost trending information and multi-year underwriting cycles, and endure the meddling of a carnival midway’s worth of employee benefits tinkerers, agents, brokers, consultants, and other conflicted middlemen. But in the long term, over multiple annual cycles, premiums do rise and fall, and the health insurance industry’s fortunes with them.

Continue reading “Good Business Models and Bad Business Models.”

Share on Twitter

THCB BLOGGERS

FROM THE VAULT

The Power of Small Why Doctors Shouldn't Be Healers Big Data in Healthcare. Good or Evil? Depends on the Dollars. California's Proposition 46 Narrow Networking
MASTHEAD STUFF

MATTHEW HOLT
Founder & Publisher

JOHN IRVINE
Executive Editor

JONATHAN HALVORSON
Editor

JOE FLOWER
Contributing Editor

MICHAEL MILLENSON
Contributing Editor

ALEX EPSTEIN
Director of Digital Media

MICHELLE NOTEBOOM Business Development

MUNIA MITRA, MD
Clinical Medicine

Vikram Khanna
Editor-At-Large, Wellness

THCB FROM A-Z

FOLLOW US ON TWITTER
@THCBStaff

WHERE IN THE WORLD WE ARE

The Health Care Blog (THCB) is based in San Francisco. We were founded in 2004 by Matthew Holt and John Irvine.

MEDIA REQUESTS

Interview Requests + Bookings. We like to talk. E-mail us.

BLOGGING
Yes. We're looking for bloggers. Send us your posts.

STORY TIPS
Breaking health care story? Drop us an e-mail.

CROSSPOSTS

We frequently accept crossposts from smaller blogs and major U.S. and International publications. You'll need syndication rights. Email a link to your submission.

WHAT WE'RE LOOKING FOR

Op-eds. Crossposts. Columns. Great ideas for improving the health care system. Pitches for healthcare-focused startups and business.Write ups of original research. Reviews of new healthcare products and startups. Data-driven analysis of health care trends. Policy proposals. E-mail us a copy of your piece in the body of your email or as a Google Doc. No phone calls please!

THCB PRESS

Healthcare focused e-books and videos for distribution via THCB and other channels like Amazon and Smashwords. Want to get involved? Send us a note telling us what you have in mind. Proposals should be no more than one page in length.

HEALTH SYSTEM $#@!!!
If you've healthcare professional or consumer and have had a recent experience with the U.S. health care system, either for good or bad, that you want the world to know about, tell us about it. Have a good health care story you think we should know about? Send story ideas and tips to editor@thehealthcareblog.com.

REPRINTS Questions on reprints, permissions and syndication to ad_sales@thehealthcareblog.com.

WHAT WE COVER

HEALTHCARE, GENERAL

Affordable Care Act
Business of Health Care
National health policy
Life on the front lines
Practice management
Hospital managment
Health plans
Prevention
Specialty practice
Oncology
Cardiology
Geriatrics
ENT
Emergency Medicine
Radiology
Nursing
Quality, Costs
Residency
Research
Medical education
Med School
CMS
CDC
HHS
FDA
Public Health
Wellness

HIT TOPICS
Apple
Analytics
athenahealth
Electronic medical records
EPIC
Design
Accountable care organizations
Meaningful use
Interoperability
Online Communities
Open Source
Privacy
Usability
Samsung
Social media
Tips and Tricks
Wearables
Workflow
Exchanges

EVENTS

TedMed
HIMSS South x South West
Health 2.0
WHCC
AHIP
AHIMA
Log in - Powered by WordPress.