Insurance Exchange May Help Solve Insurance Coverage Problem

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Modern Healthcare reports that Nancy-Ann DeParle, director of the White House Office of Health Reform, has discussed the possibility of creating a national health insurance purchasing exchange directed towards Americans aged 50 to 64 years of age.  This particular age group is said to struggle with the procurement of affordable health insurance; they are not yet eligible for Medicare but are often subject to increased medical expenditures which accompany aging. Private insurers can be reluctant to take on such  risks, or may assign far greater premiums to people in this group in an attempt to make up for those greater risks.

Modern Healthcare states:

The meeting underscored the struggles of Americans ages 50-64 to get health insurance. “Half the calls we’ve received today” were from people of this age group who faced barriers to coverage either because they had a pre-existing condition, or couldn’t get coverage through their employer, David Certner, legislative counsel with AARP, informed reporters.

DeParle stated in a teleconference that the “Obama administration was working with Congress on a new plan to set up an insurance exchange, which would offer a range of private insurance options as well as a new public plan that would allow individuals and small businesses to buy affordable health coverage.”  Deparle further commented that “the goal was to build upon the existing healthcare system.” Those satisfied with their current coverage “shouldn’t be affected at all, except you’ll see your costs get lower over time.”

Annals of Internal Medicine has also weighed in on the prospect of  a health insurance marketing exchange and reports that such an exchange could be part of a greater restructuring of the health insurance marketplace.

The Annals states:

An effective insurance exchange (a new agency that would offer Americans a choice of health insurance plans while also regulating insurers) can lower the high administrative costs that are typical in the current individual and small group insurance markets (31). In addition, the Obama platform proposed more direct limits on insurance overhead.

The Annals article reports how programs similar to an insurance marketing exchange have worked internationally, and how the move to such would bring the U.S. closer to “the international standard.” The Annals states:

President Obama’s proposal for an insurance exchange also mirrors international experience with systems in which multiple organizations pay for medical care (often referred to as multipayer systems). Requiring common benefits; similar payment standards; and other simplifying rules, such as prohibiting medical underwriting, can reduce administrative expenses well below those of the United States, as demonstrated by Germany’s sickness funds (34). The Obama campaign’s planned prohibition of medical underwriting and its adoption of new insurance regulations would move U.S. insurance arrangements closer to the international standard (34).

Considering our recent post, “Surprise, Surprise: Older Americans are Sicker than their European Counterparts,”  this might be something to look forward to.