Not surprisingly, the topic of the new Obamacare state insurance exchanges—called Health Insurance Marketplaces by the feds—came up at a panel discussion during the recent annual meeting of the Association of Health Care Journalists. The exchanges—how will they work? Will they work?—are a huge story, and reporters have questions: How do we cover this animal at the state level? How do we make sense of health insurance, which is not exactly the easiest beast to tame?
If healthcare insurance is hard for healthcare reporters, think of what ordinary folks will face when they venture into their exchange’s insurance jungle to buy a policy. They’ll appreciate journalistic guidance. So as part of our ongoing Exchange Watch series—see here, here, and here—we offer this Exchange Watch primer for reporters (and anyone else who is interested). These basic questions and suggestions should apply across all three categories of the new state exchanges—whether they are run by the state, the federal government, or by one of several emerging state/federal partnership arrangements.
For starters, look beyond the easy sources—those academics and think tank experts always eager to dish out a quote. In fact, don’t even worry about quotes at this point. The trick is to understand what’s going on, who are the players and their special interests, what are the nuts and bolts of how these exchanges work. And then: What big questions need to be addressed. Therein lie your stories.
The exchanges are a local, ongoing story, and the best sources will be the ones on the ground in your state. That means advocacy groups, local foundations, local stakeholders like insurance brokers and agents, medical societies, hospital associations, the head of the local exchange board, the staff at the exchange board, insurance regulators, consulting actuaries, and insurance companies (whose websites can be helpful even when their PR folks are not). In other words, good coverage of the biggest health story in decades requires old-fashioned reporting—schmoozing, cultivating sources, reading reports and testimony, even attending meetings of your local exchange board. That’s how you’ll find the dots to connect.
For now, your task is to learn as much as you can about the exchange in your state and its potential for success or failure. Here are five big questions:
Will policies be affordable?
Perhaps this is the most crucial question of all. Each state selects a “benchmark” or model plan that sets requirements around which other plans sold in the exchange will be based. If that plan is not affordable, people are unlikely to buy it. They may find it cheaper to take the penalty than sink money they believe they don’t have into an insurance policy. (While subsidies will help some families—in particular those with low and moderate incomes—some in the middle and above who are now uninsured may still face hefty out-of-pocket premiums to get insurance.)
If many people end up not buying insurance, for whatever reason, and taking the penalty instead, the insurers won’t get their desired mix of healthy and sick people. If only the sick and the very sick, who will generate lots of claims, apply, insurers—which must turn a profit—will simply raise rates higher, causing even fewer people to join the exchange. That’s called a death spiral.
The exchange can make its policies more affordable by requiring consumers to pay more in the form of higher deductibles, coinsurance, or copayments. That’s what Connecticut has just done, after the state discovered its benchmark policy was unaffordable. The exchange board raised copays for maternity care visits and increased the annual deductible from $2,500 to $3,000 for the “silver” plan, which is designed to cover 70 percent of medical costs.
Obamacare’s subsidies to help people buy insurance will be calculated based on the silver plan. That means they won’t go as far if people choose a richer plan, such as the “Gold” variety, which covers 80 percent of a person’s medical costs, or the “Platinum” version, which covers 90 percent. Policyholders pay a price for affordability, and there is an inherent tension between good, comprehensive benefits and affordability. How the exchange resolves that tension is a BIG story, one that thousands of people in your state who are eligible for exchange coverage may want to know about.
Key Question: What trade-offs is your exchange making to squeeze the policies into the affordability zone?
Who influences the exchange boards?