Leveling the Health-Plan Playing Field

The Commonwealth Fund issues recommendations for ACA insurance exchanges that will be operational in 2014

/ Author:  / Reviewed by: Joseph V. Madia, MD

(RxWiki News) As state and federal lawmakers prepare to design and implement health insurance exchanges across the country as part of the Patient Protection and Affordable Care Act (ACA), the Commonwealth Fund has issued a list of recommendations to guide the process.

These state-based insurance marketplaces, to be fully operational by 2014, will provide subsidized health insurance for small businesses and individuals without coverage.

The Commonwealth Fund report addresses issues lawmakers will contend with as the marketplaces are implemented, providing recommendations to improve affordability and coverage access. These recommendations include tips on how the systems should be governed, how to avoid disproportionately large shares of high-cost enrollees and how to reduce administrative costs, among others.

According to the report, these exchanges should be placed inside an independent agency with a governing board comprised of state-agency representatives and others with relevant experience. Also, the U.S. Department of Health and Human Services should devise a practical risk-adjustment system allowing states to compensate insurers with above-average health-risk enrollees, and state regulation of individual and small-group markets inside the exchanges should precisely match those outside the exchanges.

In relation to making these exchanges work for employers, the report stipulates the exchanges should offer employers the choice of one bill covering the premiums of all employees. The exchange should then allocate premiums among insurers and plans chosen individually by employees. The exchanges should also regulate lower prices, increasing value to the extent their markets allow for in terms of marketplace competition.

As for administrative costs and funding, the exchanges should develop different revenue sources to fund them in addition to looking for ways to lower administrative costs for insurers as well as employers.

To minimize the need for paperwork, the report suggested the exchanges coordinate electronic information with federal programs such as Medicaid and the Children's Health Insurance Program.

The exchanges should also work with Medicaid to ensure individuals are enrolled with the appropriate insurance program.

Perhaps most importantly for consumers, the Commonwealth Fund recommended health plans be contractually bound by the information provided on their Web sites and work to create rating systems that allow for accurate value comparison of competing health plans.

Reviewed by: 
Review Date: 
January 5, 2011
Last Updated:
January 6, 2011