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On the Third Hand: Playing field

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My personal opinion about the Patient Protection and Affordable Care Act (PPACA) public exchange system is that I have no firm opinion about whether having a public exchange system is good or bad. But, as long as the government is spending billions on the PPACA exchange system, we might as well have the system work as smoothly as it can, to milk the project for information about its advantages and disadvantages.

If the PPACA exchanges fail purely because the House Republicans wrapped them in red tape, or because the Blue states hired starry-eyed, tech-impaired flower children to set up their exchanges, we’ll never even start to learn anything from the exchanges. We’ll just get PPACA haters saying the exchanges failed because they were Satanic, and PPACA lovers saying the exchanges failed because Republicans were mean.

Part of making the exchanges work smoothly is making them fair to the insurers taking on the risk of selling “qualified health plan” (QHP) coverage through the exchanges.

The U.S. Department of Health and Human Services (HHS) has proposed setting up an auto-enrollment system, so that people who have QHP coverage this year and have lives that stay about the same can keep the coverage next year without doing anything.

See also: PPACA exchange program adds auto-enrollment feature

On the one hand, of course the HHS-run exchanges need a QHP auto-enrollment system.

On the other hand, the managers of the HHS exchanges and the state-based exchanges need to make sure an auto-enrollment system isn’t just a way to reward some big insurers for helping the exchanges get off the ground in 2014 and reward the CO-OPs for being cute. The PPACA exchange system is supposed to help create a more competitive, open market for consumers, not reward some insurers for being nice to HHS, or being cute.

I think exchange managers ought to bend over backwards to listen to the concerns of insurers that want to start selling QHPs for the first time in 2015, or expand their QHP programs into additional states in 2015.

See also: UnitedHealth may expand exchange presence

If HHS is going to reward the QHP pioneers, it ought to do so by figuring out a way to give them the equivalent of phantom stock in the exchange program, so that they prosper when the exchange does well, not by rigging the market in their favor.

On the third hand, if exchange managers show that rigging exchange markets in some insurers’ favor is a political fact of life, that would certainly be something useful to learn about how a public health insurance exchange system really works.

See also: On the Third Hand: Venezuela


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