Our health care related news of the day is Ezra Klein's op-ed in the Washington Post. He explains how the health care exchange would work and the many benefits to all consumers.
He ends his op-ed with this:
Compared with the crazy-quilt system we have now, the idea behind the health insurance exchange is almost weirdly simple: It's a single market, structured for consumer convenience, in which you choose between the products of competing health insurers (both public and private). This is not a new idea. It is how we buy everything from books to socks to soup. Everything, that is, except health insurance. The benefits of reversing that bit of accidental exceptionalism are obvious to anyone who has ever stepped inside a Target: Consumers will benefit from more choice, from direct competition between insurance providers hungry for their business, from regulations meant to protect them from deceptive products, from efficiencies of scale, and from the sort of purchasing power that only a large base of customers can provide. They will benefit, in other words, from an actual, working market -- something health insurers have managed to avoid for far too long.The America's Affordable Health Choices Act contains this strong version of the health insurance exchange.
But all health insurance exchanges are not created equal. Just as there's a weak and strong version of the public plan, there's a weak and strong version of the exchange.
The strong version is national, or at least regional. It's open to everyone: The unemployed, the self-employed and any business, no matter the size, that wants to buy in. There's risk adjustment to reduce the incentive for cherry-picking. The huge pool of users gives the exchange tremendous advantages in scale, simplicity and standardization (experts say that you need at least 20 million to fully achieve these benefits -- easy in a national exchange but harder in a regional or state-based one). With so many potential customers, insurers are eager to participate, and they will bid aggressively to ensure they're included in the market and compete aggressively to make sure they're successful within it. Over time, the combination of increased efficiencies and greater competition drive down costs, which will lead more employers to use the exchange, which will in turn give it more scale and bargaining power. You could easily see this exchange slowly emerge as the de facto American health-care system. And not through government fiat. Through consumer choice.
He ends his op-ed with this:
The only way that health-care reform will truly give us a more efficient, more effective, more affordable health-care system is if it begins to fundamentally change the inefficient, ineffective, unaffordable system we have now. The strength of the health insurance exchanges is the key to that transition. That is not to underplay the political or policy challenges. Change is scary. But it's what Obama promised, and it's what the health-care system needs.We encourage you to read Ezra's complete op-ed as well as learn more about the America's Affordable Health Choices Act.
