Today, the U.S. Department of Health and Human Services (HHS) unveiled a framework for states for designing health insurance exchanges - a feature included in the Affordable Care Act (ACA) that its supporters tout as a mechanism for delivering more affordable health coverage choices to individuals and small business owners.
SBE Council President & CEO Karen Kerrigan said the framework's conditions - even with the provision of "flexibility" -- point to costs and complexities that could make the exchanges expensive to operate. And, given the poor fiscal condition of many states, some may decide to go with the federal-partner option in running their exchanges. According to Kerrigan, it makes more sense to have a national, competitive marketplace for health coverage, or allow the exchanges to develop organically (as they currently have been) rather than imposing a framework which may end up increasing costs for health care consumers.
"The series of mandates proposed by the framework show how inefficient a 50-state exchange network could get. For example, each state exchange must operate a website with the capacity to facilitate the comparison of plan and prices while calculating other complex information and data. They must certify that a plan is 'qualified,' and have a toll-free number and offices to assist consumers. In addition, they must provide grants to 'navigators' - people or groups who will provide education and outreach about health coverage options. All of these provisions and more, including governance and other rules, will drive up costs not lower them," said Kerrigan.
HHS released the Notice of Proposed Rule Making on July 11, and is providing a 75-day window for comments and feedback from the public. Kerrigan noted that one key item that will ultimately determine affordability of health coverage offered by the exchanges is the composition of the "essential health package." The package has not been developed yet, but Kerrigan warned that one overrun with excessive mandates will be too expensive for many small businesses. Even so, Kerrigan expressed concern about the state exchanges and their inherent efficiencies and duplication given the fact that a more robust and competitive marketplace can be achieved using a national pool of consumers and reforming outdated laws. That is what the federal government should be promoting, according to Kerrigan.
"Over the last several years there has been legislation introduced in the Congress that would enable a national marketplace for health coverage while still offering protection for consumers. In order for small business owners to have the greatest amount of choice in the system and at the best price, they should be allowed to shop on a nationwide basis for a plan that best fits their employees' needs. That means no one-size-fits-all mandates from the federal government, which only limit choices and drive costs higher," said Kerrigan.
SBE Council Staff