Countries throughout the world seem to be converging on the idea of using public-private exchange systems to pay for health care.
Opponents of the Patient Protection and Affordable Care Act (PPACA) have blasted the PPACA public exchange systems, but, in spite of its operational glitches and questions about long-term sustainability, it helped bring about rapid expansion in the U.S. individual medical insurance market in 2014.
The Netherlands replaced its own government-dominated system with a market system resembling the PPACA exchange system. Even the United Kingdom, a country known for its government-run health care system, has experimented with offering enrollees in the system access to a menu of plans from a variety of providers.
See also: European Health Ins. Market Emerging.
Acute health insurance exchange programs are still struggling to gain acceptance from members of the general public, but many economics see setting up an exchange as a good vehicle for feeding government subsidies into a market without limiting the ability of free-market forces to help control costs, maximize quality and maximize patient satisfaction.
In the United States, Paul Forte, the chief executive officer of Long Term Care Partners L.L.C., sketched out a proposal for setting up a long-term care insurance (LTCI) exchange in the United States in 2013.
The Society of Actuaries recently included an updated version of the proposal in a recent long-term care (LTC) needs monograph.
Forte emphasizes in a note that his American Long-Term Care Insurance Program (ALTCIP) proposal reflects only his own views, not the views of his company or any government agency.
But the proposal could shape how LTC finance policymakers think about the LTCI exchange concept.
For more about the proposal, read on.
1. In the LTCI market, Forte says, the purpose of setting up an exchange would be more to spread risk and relieve strain on issuers than to increase sales.
Policymakers have been talking about the coming LTC storm since at least the 1960s, and the private U.S. LTCI market is about that old, Forte said.
The problem is that the market needs a system that would appeal to insurers by helping them spread risk more widely and make more efficient use of premium dollars, and, at the same time, help consumers pay for high-quality, reliable LTCI consumers, Forte says.
See also: Is this the End for LTC?.