Health Care Exchanges Start Taking Shape

With health care reform implementation an ever-present concern for the industry, the NAIC has drawn up the American Health Benefit Exchange Model Act, which it hopes will supply states with a framework with which they can build mandated health care exchange systems. The exchanges are online portals that will become an integral component to purchasing health insurance both in the individual market as well as in the small group market. Health agents have considered the exchanges a clear and present danger to their livelihoods, and so the exchanges themselves have become the subject of much political wrangling. As the NAIC released its Model Act, it provides not only clarity on implementing exchanges, but laying the groundwork for what the exchanges themselves are meant to be.

Section 1311(d) of the PPACA stipulates that any Exchange has to be established as either a governmental agency or a nonprofit entity. There are advantages and disadvantages to both. If a state were to establish its exchange as a governmental agency, they would have the relative leisure of housing the exchange in a current state agency, with ready access to state administrators and coordinating agencies, such as the state Medicaid department. Possible downsides to making the exchange a governmental agency include the potential for operations to become politicized as well as becoming confined by stringent state hiring policies.

If a state were to set up the exchange as non profit entity it would not be directly under the state’s purview and would depoliticize potential staffing and decision-making challenges. Disadvantages to having the exchange set up as a non profit include a disconnect with state policymakers. The option to have the exchange located at an independent public agency or quasi governmental agency with a board appointed for the daily facilitation of the exchange is also incorporated into the model act.