3. In insurance, every action seems to generate an equal and opposite reaction, and Goodnough identified an important one. To attract low-cost insurers to the subsidized program—in order to reduce the cost of the subsidies—the state has limited the choice for people who pay no premiums to the two lowest-cost carriers, rewarding those companies by sending a lot of new customers to them.
The insurers in turn have responded by restricting which doctors and hospitals policyholders can choose. Those limitations are controversial, Goodnough reported. She quotes Glen Shor, the Connector’s director, defending these arrangements as “the kind of cost-saving innovation that exchanges are well-positioned to bring about by promoting competition in the market.”
It seems to me the press needs to explore this assertion, as well as the warning from Nancy Turnbull, an associate dean at the Harvard School of Public Health and one of the architects of the Massachusetts reform law. Said Turnbull: “For the exchange to continue to be a big purchaser and have market clout, we’re going to need to be successful at adding more small employers and potentially other populations.”
So far, Goodnough reports, about “15 states and the District of Columbia have established exchanges, with California and Maryland among the furthest in their planning.” Other states are watching and waiting. More good reporting on the pluses and minuses of these mechanisms seems like a useful idea.