State Health Insurance Exchanges – State or Federally-Run?
Statewide Health Exchanges, which will enter the market on Jan. 1, 2014, provide the broadest change under health care reform. Individual and small group consumers will be able to purchase health insurance online through an “exchange market.”
A health insurance exchange is a competitive marketplace that provides consumers with open, transparent information about private insurance plans. Consumers still buy their policies from private health insurance companies – this new structure simply provides an efficient marketplace for them to do so.
Health insurance has traditionally been managed and regulated by the states. Reform regulations allow states to develop and run their own state exchanges. If a state does not do this, the federal government will run the exchange. If structured properly and by the state, this new marketplace would offer transparent, competitive and affordable plans to consumers from private insurance companies; reduce the number of uninsured people; and make health programs more efficient and effective.
Creation of a state-based exchange will allow a state’s elected representatives, the State’s Department of Insurance and other key state stakeholders to maintain control over a critical element of health care reform by leveraging their knowledge of the state, its people, and how they believe consumers want to buy insurance. The states would create a service tailored to the needs of their consumers, including small businesses.
An exchange bill has been making its way through the Missouri legislature. It passed the House of Representatives and will be voted upon in the next few weeks by the Senate.
The state of Kansas has opted for a different approach as it has decided to introduce legislation next year and focus this session on work groups to determine what should be included in the legislation next session.
To realize all the benefits that exchanges can produce, Missouri needs to be in charge of creating and operating this exchange. When the time comes, Blue KC is hopeful Missouri will use its votes to call for a State-run exchange so Missouri can run its own exchange.