States to Establish Health Insurance Exchanges

The Affordable Care Act of 2010 meant to provide universal health care for all Americans by January 1, 2014, has given to the states the task of establishing a health insurance exchange.  A health insurance exchange is an organized marketplace which provides consumers with a central place to review, compare and purchase health insurance from a pool of insurance companies.

States may choose the model of health insurance exchange, set the minimum standards  of services, and ensure transparency of offerings and premiums.  They may act as facilitator by establishing guidelines for different offerings and designating who may participate.  States may also choose to be active participants such as in accepting or rejecting plans, number of insurance participants or as active purchasers on behalf of consumers.

The oldest model of a health insurance exchange is the Massachusetts exchange called the Health Connector formed by the Massachusetts Health Care Reform Act of 2006.  The Health Connector administers the Commonwealth Care program for persons with income of 300 per cent of  the federal poverty limit or below who meet certain guidelines, sets premium subsidy levels for Commonwealth Care, provides a marketplace for persons not eligible for their employer sponsored plans, persons who are unemployed or those who work for businesses with no insurance plan (50 employees or less.)  It also establishes a tax penalty on those who do not participate unless they have a waiver.

The Utah Health Exchange which became operational in 2009 is another model.  It serves as an electronic portal by which consumers can research and compare health plan offerings and provide an electronic enrollment process.  It is based on the principles of personal responsibility,private markets and competition.  It provides the consumer with information on health care choices, costs, and health insurance plan services and premiums.  It also relieves employers of the burden of having to administer their own employee health plan.

In October 2010, Governor Arnold Schwarzenegger signed the California Health Benefit Exchange into law which provides for the creation of an independent public health exchange entity governed by a five member board.  Whatever model California implements will be important because the state is  home to ten per cent of the US population.

The US Department of Health and Human Services recently announced that it will release to the states new funding grants and guidelines for implementation of health exchange models.

NCQA Report on Health Insurance Plans

The National Committee for Quality Assurance, a private non profit organization, the most recognized agency that monitors health care in the US just released its State of Health Care Quality report on October 13, 2010.  This is the annual report on the quality of health care in America. The interesting finding is that "health plans that spend the most on care don’t always deliver the best quality." 

The analysis used the interphase between relative resource use (RRU), an indicator of health services utilization (e.g. doctor visits and hospitalizations) with the outcomes for five common costly chronic diseases  and comparison between different health insurance plans within the same region and within similar members. It found that the outcome was not necessarily better with health insurance plans that utilized more services and spent more.


A relevant follow-up might be to study the factors that produce better outcomes in these chronic diseases given that more dollars spent does not insure better results.  I would wager that lifestyle changes and individual responsibility for ones health will prove to be significant factors.