National exchanges vs. state exchanges
The post below names off five things that the Senate and the House could do to improve the health-care bill. Chief among them is to snatch the national exchanges from the House legislation and include them in the final product. Because the column had a word limit, I couldn't go into as much granular detail as I'd normally like. But I'm not sure that the "national exchange" vs. "state exchange" language that's developed around the issue is really the best way to understand it.
What the House bill has is not so much national exchanges as state exchanges that are run and regulated by the federal government unless the state prefers to take on the responsibility itself. The Senate bill, by contrast, has state exchanges that are run and regulated by the states, unless the states can't do it and the federal government has to step in. In the House bill, federal administration is the default. in the Senate bill, state administration is the default.
|House Bill||Senate Bill|
|National exchanges. States (like Massachusetts) can opt-opt out and create their own exchanges.||State-based exchanges. States would have to pass a law establishing the exchange and would be responsible for running it. If a state fails to establish an exchange by January 2014, the federal government could build it.|
|To eliminate adverse selection and prevent insurers from attracting the healthiest applicants outside of the exchange, all nongroup policies have to be sold inside the national exchange.||The nongroup market can exist outside of the exchanges. Insurers that participate in the exchange would be required to market the Silver and Gold tier plans in the exchanges but would be exempt from marketing the Bronze plan within the exchange. Insurers could therefore market the lower-cost/high deductible Bronze plan outside of the exchange or stay out of the exchanges altogether and attract healthier people into the non-exchange nongroup market.|
|The exchange can negotiate premiums, administrative costs with insurers, selecting only the most prudent of policies.||The exchanges can take an insurers’ premium history into account. Some discretion for the exchanges to negotiate with plans around premiums.|
January 11, 2010; 5:31 PM ET
Categories: Health Reform
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