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PPACA exchanges: The early days

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MADISON, Wis. (AP) — It will be a tough task implementing the online health insurance marketplaces that are required of each state under the Patient Protection and Affordable Care Act (PPACA), and there will no doubt be consumer horror stories about trying to navigate them, insurance company executives warned Tuesday.

The insurance exchanges will offer private coverage to the uninsured and subsidies for low-income consumers. They’re supposed to be open for enrollments by Oct. 1 and operating fully by Jan. 1.

“There’s a great deal of uncertainty almost everywhere you look,” said Mark Moody, the president and chief executive officer of WEA Trust, which offers insurance to Wisconsin school districts, state health plan members, and local units of government.

Just like when Medicare Part D was implemented, using the exchange will be stressful and chaotic for months before things settle down, Moody said.

“There will be horror stories, stories of so-called train wrecks,” Moody said at the panel discussion organized by Wisconsin Health News. “It will be a difficult process to get the exchanges started. … I think fundamentally the Affordable Care Act is on the right track but it’s going to be a long, slow process.”

How Wisconsin’s exchange will work under real-life conditions is untested, said Mike Hamerlik, the president and chief executive officer of WPS Health Insurance, which covers about 164,000 people through health plans sold to individuals and small employers.

“It is dependent on proper execution,” he said. “How this is rolled out is going to largely define at least the pace at which it is adopted.”

Neither WEA Trust nor WPS are participating in Wisconsin’s exchange, at least initially, because of all the uncertainty.

Gov. Scott Walker declined to have Wisconsin construct and run its own exchange, instead ceding that responsibility to the federal government. Walker, who like most Republicans staunchly opposed President Barack Obama’s signature health care law, also rejected a federally funded expansion of Medicaid.

Instead, Walker’s proposed budget would restrict the income eligibility requirement for qualifying for the state’s BadgerCare Medicaid program to no more than 100 percent of poverty. People currently on Medicaid who earn up to 200 percent of poverty would instead purchase their insurance through the exchange.

Walker assumed that 93 percent of the people who would lose BadgerCare coverage would still buy insurance through the exchange. But the nonpartisan Legislative Fiscal Bureau said that estimate was “unreasonably optimistic.”

Linda Hoff, the president and chief executive officer of Physicians Plus Insurance Corp., said during Tuesday’s panel that she believes navigating the exchange will be difficult, and healthy young people won’t even bother trying. Physicians Plus covers about 105,000 people in south central Wisconsin.

“We’re going to see an uptick in the uninsured coming through the ER,” Hoff said. “That’s only going to put more pressure on costs going up everywhere else.”

Walker’s budget includes a $73 million payment to hospitals to help defray the anticipated costs of more uninsured people seeking coverage at hospitals.

Lon Sprecher, the president and chief executive officer of Dean Health Plan, said his biggest concern was that only high-risk people will end up joining the exchanges.

The panel focused largely on the implementation of the exchange, but also touched on other elements of the health care law, including whether it will save money and provide people with better options.

The key to transforming the nation’s health care system is for everyone involved to be more transparent about the true cost of care, Hamerlik said. The cost of health care is one of the most controlling factors in people’s lives, and you can’t have a true marketplace unless all prices are published, he said.

“The whole purpose of this is to provide consumers with a choice,” he said.

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