In the latest issue of Health Affairs, Jon Kingsdale — who until recently ran the successful Commonwealth Health Insurance Connector Authority in Massachusetts — suggests that the new state-based health exchanges should function as shops for insurance and help customers choose a compatible insurance plan. A purchaser of insurance should be able to “generate rate comparisons for any level of benefits simply by providing his or her date of birth, household size, and ZIP code. These rating rules make it possible to automate insurance pricing and facilitate comparison shopping in an exchange,” Kingsdale writes.
In July, the Department of Health and Human Services (HHS) is preparing to unveil a new website that will allow individuals and small businesses to comparison shop between different coverage options, “including private insurance plans, high risk pools, CHIP and Medicaid.” Here is how Karen Pollitz — head of the new Office of Consumer Information and Insurance Oversight — explained the new web portal during yesterday’s ‘web-chat’:
POLLITZ: The first thing we’re going to do is open a new website. That’s going to be a great big website. I don’t have the name of it yet, but that is a big project that’s in the works and that will show, on July 1st, all of the big health insurance policies that are for sale, for individuals and small businesses throughout the country. So you can go on the website, look up your state and see what’s available for you. A little bit later this year, we’ll put out information about pricing, sort of what, at least the sticker price is for those policies. And then, a few months down the road after that, we’ll start loading up some really important performance information. So how do these place really work for people. What kind of enforcement actions and complaints and what are the things they do well, so that folks can have a really better understand of what their options are.
The federal government hopes that states will adopt the new portal as a model for providing consumers with information in the exchanges and all the different stakeholders are advising the agency for how best to design the new site. As Politico’s Pulse notes, “Reform proponents like Families USA want HHS’s new consumer insurance portal to include an ‘in-depth compendium of plan information‘ in multiple languages. Others, such as Aetna, say that HHS’s sky-high demands for information go beyond Congressional intent and that the portal should ‘not be a mandatory, comprehensive and continuous reporting obligation for insurers on all open and closed insurance products.’”
Kingsdale notes that the exchanges will have to determine how to present information to consumers in the most useful and usable manner. “How many choices to offer, and of what kind, are matters of judgment and consumer preference,” Kingsdale suggests. “Too much choice may confuse consumers and lead to adverse selection. On the other hand, too little choice may conflict with consumers’ preferences and stifle innovation in the design of insurance policies and benefits.” Kingsdale writes that exchanges have to create administrative efficiencies and add transparency to the health care system. “Today, in the absence of exchanges, the non group and small-group markets offer a bewildering array of benefit choices and crate hurdles to purchasing coverage.” “Many of the functions associated with sales, enrollment, premium billing, and collections could be streamlined through a combination of manual rating and economies of scale,” he predicts.