PI Original Matthew Blake Friday October 21st, 2011, 10:52am

Health Exchanges Still In The “Studying” Stage

In order for the landmark Affordable Care Act to be implemented successfully, Illinois, along with other states, needs to set up a health insurance exchange. The General Assembly, though, has dithered and what form a health exchange will take isn’t at all clear heading into the state’s fall veto session.

In order for the landmark Affordable Care Act (ACA) to be implemented successfully, Illinois, along with other states, needs to set up a health insurance exchange. The General Assembly, though, has dithered and what form a health exchange will take isn’t at all clear heading into the state’s fall veto session.

Brian Imus, director of the Illinois Public Interest Research Group, says he is “confident that lawmakers will create an exchange in the veto session,” which begins October 25 and runs for two weeks. “But will they do it in a way that increases competition,” Imus asked. This week, Illinois PIRG put out a study that rates the health exchanges states have so far set up – the Massachusetts exchange is one model Illinois might be smart to emulate. 

The study is more than just another advocacy group giving their two cents. It’s the only game in town, because the bipartisan study group set up by the General Assembly to make recommendations didn’t, well, make any recommendations in the report they released on October 6. 

The lack of instruction provided by the committee of General Assembly lawmakers (official title: Illinois Health Benefits Exchange Legislative Study Committee) is particularly frustrating because the group was formed in response to Gov. Pat Quinn and the General Assembly failing to hash out a deal last spring on health exchanges.

According to ACA, state-run exchanges should be up and running by January 1, 2014 – and ideally established a year or two before then. If a state chooses not to create their own exchange, the federal government will set one up for them.

So far 12 states have created an exchange. Despite widespread GOP backlash against health care reform and a Supreme Court challenge of the law, just two states – Florida and Louisiana – have announced they have no intention of setting up an exchange.

Often compared to airline price comparison Web sites like Travelocity, exchanges should provide easy to access information on the prices and coverage options offered by private insurance companies. 

Illinois could especially stand to benefit from a well-functioning exchange. According to the bipartisan study, 52 percent of Illinoisans get health care from their employer while 32 percent get health care entirely funded by the government, mostly through Medicare and Medicaid. That means that they are hundreds of thousands of state residents that currently have to navigate the health care market on their own.

Also, Illinois has the second most consolidated health care industry in the country.  Forty-nine percent of residents get their insurance from one company, Health Care Service Corporation, according to the report.

But while the bipartisan report contains these helpful pieces of information, it’s also painfully equivocal in how lawmakers and Quinn should act. 

The bipartisan study group notes that, “three main options have been offered for states” as to how best to run the exchange: a state agency, a quasi-government organization, or a non-profit organization. The report notes that each offer, “benefits and drawbacks” (example: “The third option, a non-profit organization, expands on the benefits and drawbacks on a quasi-government organization.”) If the committee formed any preference for either of these models, it’s scrupulously concealed. 

The Illinois PIRG study is kind of the opposite, offering precise letter grades based on factors like the governance structure and the ability to use exchange regulations as a check on insurance companies. For example, Illinois PIRG wants a decision-making exchange board that is without representatives from the insurance industry. 

Illinois PIRG is particularly impressed with how “the Connector,” the Massachusetts exchange set up by then-Gov. Mitt Romney has empowered health care consumers. The Connector has “served as a template” for other exchanges.

Image: tophealthpersonalcare.com

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