Options Offered in Health Insurance Exchange Quest

There is a wide range of policies related to health insurance exchanges that states can pursue, depending on local market conditions, to leverage higher quality, more affordable insurance for individuals and small businesses. Such is the key message from a white paper issued by The National Academy of Social Insurance and the Georgetown University Health Policy Institute .

The paper, Active Purchasing for Health Insurance Exchanges: An Analysis of Options, by Sabrina Corlette and JoAnn Volk, research professors at the Georgetown University Health Policy Institute, addresses the issue of exchanges as "active purchasers” and was written to assist states with the implementation of health insurance exchanges. This task is a key element of President Obama’s Patient Protection and Affordable Care Act (ACA).

"It shouldn't be an either/or choice,” says Corlette, co-author of the brief. “States have a lot of flexibility in how they design their exchange and how they set their market rules to promote higher quality, more affordable coverage. Our analysis also shows that states will have to empower their exchange to take on a minimal level of 'active purchasing' in order to meet the ACA's requirements and this includes the discretion to exclude a plan if it is not in the interest of enrollees."

In the white paper, the authors examine a range of policy options that states may want to consider that would empower their exchanges to be active purchasers, from additional certification criteria to alignment with other state purchasers to selective contracting and price negotiation.

"There are also a number of environmental factors that could support—or undermine— active purchasing in the states," says co-author Volk. "These include factors such as market concentration, market rules, the number and health of status of exchange enrollees and the exchanges' ability to recruit and maintain a leadership and staff free from conflicts of interest and with requisite expertise."

The authors state that health insurance exchanges are a critical component of the ACA's provisions to expand access to coverage to millions of individuals. In addition to being a gateway for people to purchase subsidized health insurance, exchanges are expected to help organize insurance markets and promote more effective competition among health plans.

The white paper is a product of a NASI project funded by the Robert Wood Johnson Foundation to provide technical assistance to states developing health insurance exchanges. An issue brief on harmonizing the exchange and state Medicaid programs is forthcoming.

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