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The Red, White and Blue: Health Insurance Exchanges

by Don Garlitz, Executive Director, bswift Exchange Solutions

November 5th, 2012

The presidential election will have major impact on the way public health insurance exchanges develop. Red states are looking for flexibility to establish exchanges on their own timetables and according to their own strategic visions. Some worry about the long-term cost to maintain a state exchange when state budgets are already in crisis in many states. Yet they are loathe to yield to a federally-run exchange where they would compromise the autonomy they are accustomed to in determining Medicaid eligibility, regulating insurance markets, protecting consumers, and managing administrative costs. Red states that establish exchanges will largely look to rent the necessary IT infrastructure from the private market and staff mainly by outsourcing.

Blue states are embracing the philosophy of coverage for all, and are moving down the path of establishing exchanges and expanding Medicaid as permitted under the Affordable Care Act. Following the lead of Massachusetts, these states envision the tax credit as the great “equalizer” in health care disparity, and have committed state resources to the cause. Some blue states are building exchange IT infrastructure, which the state will own and control and be responsible to maintain.

Corporations are increasingly waving the “white flag.”

Employers are less concerned about politics than the bottom line, which is being increasingly eroded by health plan liabilities. Corporations are increasingly waving the “white flag.” They are considering how they can distance themselves from responsibility for an impossibly steep health care inflationary trend. The concept of defined contribution is gathering steam at the corporate level as one way to create that space, and corporations are holding out hope for the success of provider payment reforms that might rein in costs. If payment reforms are successful in creating a system where providers (doctors and hospitals) thrive when people are healthy rather than sick, those reforms will be most easily adopted in a world where consumers vote with their wallets. Insurance exchanges offer a system for accessing insurance that is perfectly suited to the culture where the consumer controls the money.

No matter what the future holds after tomorrow’s elections, bswift has experience “reaching across the aisle” so you can be confident bswift has a powerful solution that will address the needs of companies and state exchanges, whether red or blue.

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