What to Look for in an Affordable Health Insurance Exchange

“Don’t worry about the deadline,” a Legislative colleague recently told a group in Menomonie. “Preparations are being made to make sure Wisconsin creates an exchange.”

Under the federal health care law, states had to provide detailed plans for creating an exchange by November 16th. However, Governors in several states, including Wisconsin, indicated they were delaying plans until after the presidential election.

The election outcome made it clear Wisconsin must move forward on creating an exchange or the federal government will step in and create one for us. Fortunately, federal regulators extended the deadline to December 14th for Wisconsin to deliver its “blueprint” for an affordable health insurance exchange. 

A properly created exchange will give small business owners, farmers and self-employed folks the same bulk-buying power enjoyed by large companies. The exchange creates a virtual marketplace allowing for apples to apples comparison on private insurance plans. Information is available in an easy to understand searchable website; something like Expedia or Orbitz.

The idea behind the exchange is to make buying insurance more transparent and competitive and, through competition, drive down costs.

I introduced bills in the last two sessions to create a state-wide insurance exchange. As the Governor and his administration finalize plans for Wisconsin’s exchange they should take a hard look at the bill I wrote and use it as a blueprint. My bill clearly defines the important aspects of a good or well-designed exchange.

First, the website must have clear and comparable information on cost and quality. Information on the cost and quality of health practitioners is just as important as the price of a policy.

The exchange must focus on holding down health costs. The exchange should require companies to meet certain rules so businesses can make real apples to apples comparisons. Standards should be set for minimum coverage. Hidden costs and companies trying to wriggle out of commitments must be forbidden.

Some may be tempted to make the exchange part of state government – perhaps housed in the Department of Health or the Office of Insurance. This is a mistake.

To gain the confidence of consumers and the trust of insurance professionals and health providers, the exchange must be insulated from the political influence. The way to do this is to create an independent authority similar to the very successful Health Insurance Risk Sharing Program (HIRSP).

The board members governing the exchange must have no financial interest in the insurance or health field, but they must be knowledgeable about the industry. They must comply with state ethics and conflict of interest laws. The exchange should be subject to open meetings, open records and auditing laws. Unlike the current Wisconsin Economic Development Corporation, the Governor must not serve as chairmen of the board; however, the board should regularly report to the Legislature, the Governor and the people of the state.

A well-designed health insurance exchange should preserve the important role insurance agents have within the health system. Agents act as the human resource department for small and busy business owners. The agent can sort through information and help owners make the right decision for their company. The agent can also play an important marketing role for the exchange. It would be wise for the Governor to seek out the agent community and work together with these leaders who work in every community across the state.

The single biggest step Wisconsin political leaders can make is to provide small business owners with affordable health insurance. We should stop making affordable health insurance a political issue and start making it a reality for Wisconsin business owners. The coming deadline is the Governor’s opportunity to move Wisconsin forward. Let’s make sure we get the job done right.