By Cindy Zeldin
This article originally appeared in the Atlanta Journal-Constitution.
Earlier this month, Gov. Nathan Deal signed an executive order creating the Georgia Health Insurance Exchange Advisory Committee, which is charged with determining whether Georgia should establish a state-based health exchange.
If well crafted, a Georgia insurance exchange has the potential to increase transparency, present clear and meaningful choices, and promote better value for consumers who don’t have access to a health plan at work.
The Affordable Care Act authorized state-level health insurance exchanges, providing a basic framework and initial funding. By 2014, each state’s exchange must be able to enroll individuals and small businesses into health insurance plans and certify that plans meet certain requirements, such as an adequate provider network and an essential benefits package. Within this framework, Georgia has considerable flexibility to fashion a structure that best meets our state’s individual needs.
In Georgia today, just over half of us get health insurance through a workplace plan. This arrangement has persisted because large companies can easily pool health risks and typically have human resources departments that can bargain with insurance companies. Health insurance purchased through the workplace is not taxed, and employers typically contribute a hefty portion of the cost. The individual health insurance market boasts none of these benefits.
In fact, for Georgians without the option of a workplace health plan, navigating the health system can be a minefield. Thus, a well functioning exchange should replicate the best of what works for employment-based health insurance: Pool risk, leverage enrollee volume to drive bargains with insurance companies and administer tax credits that can help level the playing field with those pre-tax workplace plans.
We should focus on three core goals: Provide structured choices that supply the information and tools to facilitate optimal purchasing decisions for consumers; create incentives for insurance companies to compete based on value rather than by cherry picking the healthiest applicants; and serve as an easy-to-use, one-stop-shop and provide navigation assistance to programs like Medicaid and PeachCare for Kids where appropriate.
First, the exchange will work best for consumers when choices are presented that draw their attention to the features of the plan that truly matter. Without the right information, a dizzying array of plan options with no rhyme or reason is not helpful. With the right information, structured choices are empowering. Consumers might want to know what a common procedure would cost after factoring in deductibles and co-pays, for example.
Second, the flip side of consumer choice is insurer competition. The exchange should promote value as the locus of competition by providing clear information about price and quality, such as the percentage of consumers’ premium dollars that are being spent on medical care so the consumer can determine if that insurance company is worth their business.
There should also be a concerted effort to limit the ability of insurers to market stripped-down plans outside the exchange to the youngest and healthiest consumers, which could threaten the strength and viability of the exchange and raise prices for consumers purchasing through the exchange.
Third, because more than half of Georgia’s uninsured population will be eligible for the Medicaid program when it is expanded in 2014, the exchange must be able to enroll these individuals into this program, requiring coordination between the exchange authority and our state’s Department of Community Health.