A new issue brief from Employee Benefit Research Institute has shined a new light on the pitfalls that may await if lawmakers move forward with the idea of a health insurance exchange.
When I asked EBRIs Paul Fronstin, who co-authored the brief with Murray Ross of the Kaiser Permanente Institute for Health Policy, what must-haves a successful exchange should contain, he said, I think in order to have a successful exchange, you need to change the rules in which that market works. This means that if Americans are required to purchase coverage, companies have to be required to sell it, and this could set off a chain reaction within the industry thats never been seen before.
If a national mandate, public plan and guaranteed issue provisions are in the final legislation, employees may have hardly any other options than the public health plan in the exchange. Such circumstances may lead employers to completely drop health care coverage.
Although EBRIs brief is non-partisan on whether to create the exchange, the organization seeks to inform stakeholders about the measures that would be necessary to assure that it would be effective.
Although an exchange is effective in Massachusetts, Fronstin says making the state a blueprint for the nation is the wrong way to go. You cant simply take what they are doing in Massachusetts and replicate it for the nation or even other states, he said, especially since these other states have much larger numbers of uninsured than the small New England state.
Another concern is that an individual mandate would be necessary to power the exchange. In a nation where about 62% of Americans under the age of 65 are covered by employer-based programs, a mandate could be troublesome because of higher premiums that many consumers may not be able to afford. Although most proposals, including Sen. Kennedys plan released last week, provide subsidies to low-income individuals something Fronstin said is necessary middle-class workers may feel squeezed by premium costs.
