Tag: Alan Weil

The Pointless Search for Meaning in Exchange Prices

With ten states and D.C. having reported preliminary information on the prices of plans in their new health insurance exchanges, partisans on both sides of the Affordable Care Act have pounced on the news to reinforce their preconceived notions.

Supporters of the law report that “rate shock is a crock” and that prices are “surprisingly low,” while opponents look at the same data and conclude that “Obamacare will increase individual health insurance premiums.” Gary Cohen of CCIIO’s recent announcement that rates on the federal exchange will be made public in September will surely raise the fevered pitch of commentary.

But what do these numbers actually represent? Carriers submitting bids start with the prices of their current products and then adjust them for the myriad changes in the insurance market that go into effect on January 1, 2014.

Those changes include: elimination of health status underwriting, compression of rates by age, partial standardization (and in most instances significant expansion) of the benefit package, expansion of the market to a largely unknown population due to premium subsidies, effects of the “three Rs” (risk adjustment, reinsurance, and risk corridors), a completely new product distribution system, and a host of other changes in the health care and health insurance environment.

Needless to say, these many changes introduce a tremendous amount of uncertainty.

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Op Ed: Make It Simple, Please!

The Patient Protection and Affordable Care Act creates a continuous set of coverage options for every American with income below 400 percent of the federal poverty level, or about half of the nation’s population. Sounds simple, right? To participating families it needs to be, but it will take a tremendous amount of work and creativity on the part of states and the federal government to achieve this vision.

The Affordable Care Act’s guarantee of coverage is actually a patchwork quilt that includes Medicaid, the Children’s Health Insurance Program, employer-sponsored coverage, and plans purchased with subsidies through the new insurance exchanges. While almost everyone will be eligible for some form of coverage, the source of coverage matters because it determines the benefit package, the cost-sharing provisions (deductibles and co-pays), and how costs are allocated between state and federal governments.

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