Various media reports have been bringing out people will have access to affordable coverage when the new Exchange starts in Connecticut in 2014.
Regretfully actual provisions in the new health reform law, on how the state based Exchanges will operate do not say this will happen. What the reform law, which is being called P PACA, does say is:
+ An insurance company that decides to participate must offer the same premium for the same plan whether it is purchased through the exchange or out side. Thus, where does the idea, medical insurance through the Exchange will become affordable, come from?
+ An insurance company has to combine their medical treatment claims from exchange plans with plans outside. What this says is - if four companies participate on Jan. 1, 2014 and each is covering 50,000 people the first person who goes to the Exchange and enrolls will join a "pool" of 50,000 - NOT a "pool" of 200,000. Thus, how does the person who creates the publicity, which says it will be affordable because it is bigger, think this is going to happen?
+ There is no requirement for a insurance company to offer all their current plans in the exchange. Plans available in the Exchange will be in four groups - Platinum - Gold - Silver - Bronze. Each of these will have different maximum out of pocket limitations. Thus, where does the idea people will have more choices than they do now come from?
+ P PACA gives states money to start up the Exchange - BUT the law also says the Exchange must be on its own with no money from the state after one year. Insurance companies may have to give the exchange some funds because of the work they do for marketing & enrollment. The big question then becomes - where will the additional money to run this extra layer come from?
+ P PACA does include complex provisions on how people, based on income level, will be able to receive financial assistance. The question becomes - where is the money going to come from to provide this assistance? More taxes for everyone?
It is important to understand the people who wrote P PACA do not really understand how the medical insurance market works. Consequently, I recommend anyone who sees media coverage about Exchanges having more affordable coverage and providing more choices to write a letter to the editor to challenge this. You may want to ask - how will more affordable plans and more choices really be accomplished?