With implementation of national health care reform, it is estimated that by 2020, 180,000 more Connecticut residents will have health insurance, with many buying it on their own. Choosing the right insurance plan is daunting, and until now, government regulators and the insurance industry have done little to inform or protect consumers.
The good news is the federal Affordable Care Act provides Connecticut an important tool to help individuals and small businesses make wise purchases – a state health insurance exchange. However, we must be careful about how that exchange is established and run.
The public’s trust in the insurance industry and government regulators has been undermined by decades of weak consumer protections and a sense that the deck is stacked against consumers in favor of big insurance companies. Insurance company marketing has not been designed to make options clear and even careful shoppers are often overcharged for plans that don’t meet their needs. Deceptive insurance company marketing was one of the leading forces that pushed policymakers to pass health reform.
Under federal health care reform, the new health insurance exchanges will provide consumers and businesses with clearly understandable options and health plans that compete based on quality, affordability and the value of their products.
The exchange may not include all health insurance plans, only those that meet reasonable standards set by a governing board will be approved. And it is the makeup of the governing board that is where the success of the exchange lies. Under the federal law, each state can create its own exchange. Legislation now pending in the General Assembly offers two distinct and very different visions for Connecticut’s exchange.
One problematic bill would include insurers, health care providers, and large businesses on the exchange’s governing board. But isn’t it a conflict of interest to allow people with financial ties to insurance companies to decide which companies get to offer their products in the exchange and what they have to cover? How would the state decide which insurers and provider groups are to be included on the governing board and get to set standards?
In Maine, Massachusetts and California, where exchanges are already being created, neither insurers nor practicing providers serve on the governing boards. Indeed, including them could create legal problems for the state.
Fortunately the other bill would include only health care experts, state agencies and consumers on the exchange guiding board, and creates dozens of other consumer protections and sensible provisions to keep the market fair and keep prices down.
Connecticut’s health insurance exchange will eventually serve one in 10 Connecticut residents and it must be a trusted and balanced source of information that consumers can rely on. It must be independent of conflicting interests, and above even the perception of conflicts, with the best interests of consumers as its priority.
The makeup and authority of the health care exchange governing board is one of the most important details of health care reform that could have the greatest impact on consumers. Leaving insurers to police themselves is how we got into this mess – skyrocketing costs, eroding benefits, and rising uninsured. Putting them in charge again makes no sense.
Ellen Andrews is the executive director of the Connecticut Health Policy Project.