Health Care

This report assesses the progress that the states have made, and for the states that have begun to set up their health care exchange, evaluates them on the myriad policies and criteria that will determine whether it is ultimately successful in improving health care for consumers.

The creation of a new health insurance exchange offers our state the chance to build a better marketplace for health care.  The exchange can help individuals and small businesses by increasing competition and improving choices in the state’s insurance market.  By providing better options and better information, and negotiating on behalf of its enrollees, the exchange can level the playing field for consumers.

A well-made state exchange can help deliver lower costs for individuals and small businesses. Just as big businesses negotiate with insurers, using the bargaining power of their employees to push for lower premiums, so too can exchange enrollees benefit from a muscular exchange that negotiates on their behalf for better choices and lower costs.

But to live up to this potential, the exchange will need to do more than simply take all insurers who want to sell their products to its enrollees. It will have to take a close look at the benefits being offered, and the premiums and cost-sharing being charged, to assess whether they provide a good value.

Based on that assessment, the exchange should then negotiate with insurers to offer lower cost, higher quality coverage options for consumers. Similarly, the exchange should monitor year over year premium increases to ensure enrollees continue to get a good deal. And because negotiating power and economies of scale depend on having a large pool of enrollees, the exchange should be made as large as possible.

The opportunity to create an exchange will allow the states to increase competition and improve choices in their insurance markets. However, to fully realize this opportunity, the exchange must be accountable to the public, and the individual and small business consumers who will buy their coverage through it.

The best way for the states to realize these goals is to make decisions about the exchange’s structure and governance to ensure that this important new entity is transparent in its operations, and fundamentally accountable to the public interest.

By following the recommendations below, the states can ensure that their health insurance exchange reflects these principles.