Listen to the Voice of Experience
"Ten years from now," writes Jon Cohn, "if health care reform is a boondoggle, you might be able to trace that failure back to a decision in the wee hours of last week's Senate Finance Committee hearings."
The decision he's talking about is the rejection of John Kerry's amendment "Empowering State Exchanges to be Prudent Purchasers." Olympia Snowe apparently dropped the guillotine, worrying that it would mean more government, which it would. But it would also mean working exchanges offering products that consumers can actually trust at prices they can actually afford. Cohn explains:
In the bills that passed three House committees and the Senate Health, Education, Labor, and Pensions (HELP) Committee, the exchange would be a "prudent purchaser." In other words, it would have a staff that bargained with insurers to bring down premiums -- and that made sure all plans lived up to strict guidelines for coverage and customer service. In effect, any insurer that wants to offer coverage through the exchanges has to get the equivalent of a "Good Housekeeping Seal of Approval" from the administrators. This is precisely how it works in Massachusetts.
By contrast, the Senate Finance bill envisions much weaker exchanges. Instead of choosing which plans to make available, the exchange administrators would, by law, have to accept any plan that meets a relatively minimal set of standards.
Jon Kingsdale, who runs the Massachusetts exchange, calls that a recipe for "policy disaster," as consumers faced a dizzying array of more expensive, less regulated choices. "It would be like telling your grocery store they have to offer every single kind of bread baked by every single bakery. ... The exchanges would be nothing more than an automated Yellow Pages."
There's a good chance that Kerry's amendment will triumph down the line, and the "prudent purchaser" language included in the House and HELP Committee bills will be in the final legislation. But it's worth keeping an eye on. If Kingsdale, the only guy who's actually run one of these exchanges effectively, says this is necessary, then it's necessary.
Photo credit: By Win McNamee — Getty Images
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