Health Insurance Changes

Open enrollment for Obamacare health insurance exchanges begins October 1st, and consumers are getting their first real look at what state and federal marketplaces have to offer. But even as the ink on the menu is drying, exchange operators are already looking toward future changes.

In a perspective piece published earlier this month in the New England Journal of Medicine (NEJM), policy researchers Henry Aaron and Kevin Lucia discussed a few ways exchanges might be able to “help shape the organization, quality, and financing of all U.S. health care” in years to come.

What You Can Expect to Find in October

State and federal exchanges launch Tuesday, and open enrollment lasts until March 31, 2014. Coverage begins January 1, 2014, and anyone who does not have insurance coverage in 2014 is subject to a monetary penalty.

Any legal U.S. resident can use the exchanges to find insurance coverage. The exchange operators have partnered with private insurers to provide packages of care for individuals and, starting in 2015, small businesses.

States are the primary regulators of their exchanges, though many have decided to let the federal government manage their plans for now. Visit healthcare.gov to learn more about your state’s plan.

In addition to the marketplaces, certain states have chosen to expand free Medicaid coverage to those who earn up to 138 percent of poverty level. Most people earning less than 400 percent of poverty level will qualify for subsidies to help pay for health insurance they buy in the exchanges.

“There will likely be glitches with the roll out of a huge startup,” Lucia, project director of Georgetown University's Health Policy Institute, told Healthline. “The key is that governments have a process in place to identify them and work on resolving them. Don’t be surprised to see a deferment of some of the more consumer friendly parts of the exchanges.”

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An Eye on the Future

Exchange operators have not yet exercised their full powers under Obamacare, according to the NEJM piece, instead opting to first focus on the basics. But as they begin to function, and if they find success, the exchanges will expand and adapt.

The first change noted by the authors is that the scope of coverage will grow. As exchanges and insurers establish a relationship over the coming years, states will be allowed to open up their markets to larger employers.

Private exchanges are already leading the way. Several large employers have chosen to give employees credits to use in private exchange marketplaces.

States also have the right to bar insurance sales to people and small businesses outside of the exchanges, creating a “unified market.”

"I would describe it as unifying the market for residents to be able to see all the options available in the individual market, to have them all in one pool, which makes sense for competition,” Lucia said.

So far, only Vermont and Washington D.C. have chosen this type of exchange, and not without debate. But Aaron and Lucia speculate that if the outcome for these two states is good, other states may follow.

Another way state exchanges can ensure high quality care, they say, is by advertising information on the prices charged by different hospitals and doctors. The ability to comparison shop would provide greater power for patients.

States also have the ability to experiment with payment methods, including bundling payments, which would likely bring patients' medical bills down.

"Down the road, if using any kind of payment reform opportunities seem to be of benefit to consumers as far as spurring competition, I think that's something that should be considered,” Lucia said. "It's not about decreasing the number of plans that consumers have. It's about making sure those plans have the characteristics that lead to higher quality care.”

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