We’ve all heard Secretary Sebelius talk about how amazing it is that “for the first time” Americans who buy their own health insurance have a place where they can see all of their options in one place, compare plans, and enroll in coverage. Anyone who has taken more than a cursory glance at the individual health insurance marketplace in the past decade knows that there have been plenty of places to do just that, for about as long as the internet has been a mainstay in American homes. Even before that, brokers were offering one-stop-shopping for health insurance plans, but it was all done with paper brochures and plan description forms, since most of it wasn’t available online. As soon as it was, brokers began creating websites where clients could easily compare plans. Companies like Norvax and Quotit perfected the art of online quoting and plan comparison many years ago, allowing most independent brokers the ability to provide a very reliable and simple one-stop-shopping experience for their clients.
In addition, brokers who are certified to sell products in their state exchange are currently able to provide a more comprehensive shopping experience than the exchanges. That’s because those brokers can also show clients off-exchange plans, which provide more options for people who know that they won’t qualify for a subsidy (people who do qualify for a subsidy should limit their shopping to exchange plans, because the subsidies are not available outside of the exchanges).
We all know how open enrollment has been so far, especially in terms of the public’s overall perception of the ACA. But imagine what this initial open enrollment period would have been like without the exchanges. The $170+ million (the low-end estimate) that the government has spent on Healthcare.gov could have been allocated to expanded enrollment portals for Medicaid and to making sure that the data hub used to verify identity, citizenship and income was perfected before October 1. States like Colorado that have spent millions of dollars and thousands of hours creating exchanges could have also allocated those resources elsewhere over the last few years.
What the ACA did very well was reform the overall individual market. No more pre-existing condition worries. No more fear of rescission because you forgot to include something in the medical history section (the law bans rescission except in cases of fraud, but not having to complete a medical history questionnaire eliminates most of the problem in the first place). Parents can keep kids on their policy through age 26. Lifetime and annual limits are a thing of the past. So is swiss-cheese coverage that left people with insurmountable medical bills even though they had health insurance (all individual plans effective January 1, 2014 or later have to cover the ten essential benefits, regardless of whether they’re sold on or off-exchange). Preventive care is covered with no cost-sharing, which makes it easier for people to be proactive in taking care of their health. Subsidies are available to help make health insurance more affordable for low- and middle-income Americans. All of these changes have made the individual health insurance market much better: it’s easier to compare apples to apples now, coverage is accessible even for people with health conditions, and there’s peace of mind in knowing that any policy you buy in 2014 will provide a true safety net in case of a serious illness or injury.
But we could have just used the existing channels to sell the new policies. Health insurance carriers and independent broker sites were already able to provide secure online enrollment long before the ACA was created. The government could have focused all of their resources on Medicaid expansion enrollment and making sure that the data hub was perfect. Then health insurance carriers could have linked to the hub to verify subsidy eligibility info for applicants, and subsidies could have been applied to eligible applications without the exchange having to be in the middle of it all.
Health insurance carriers did their part quite well. They created new plans for 2014 and did the actuarial work to price the plans based on the new dynamics of an individual market that utilizes guaranteed issue coverage and also includes an individual mandate. Carriers participating in the exchanges had their plans ready go to before October 1, so that applicants could begin selecting policies. Some carriers also created off-exchange plans, while others opted to only sell their plans off-exchange. But regardless what sales platform they were using, they all had their plans ready to go.
As it is, the government needs brokers and carriers to be involved with the enrollment process. Imagine how much easier all of this would have been without the layer of complication that the exchanges have added? Trying to reinvent the wheel is rarely a good solution, and this is no exception. The reforms that the ACA brings to the individual health insurance market were desperately needed and were not going to happen without government intervention. But there wasn’t really a need for the government to try to recreate the actual sales platform. That part of it had long ago been honed by the free market, and would have continued to work well with the new ACA-compliant plans.
As a supporter of the ACA and the myriad changes that the ACA brings to the individual market, it’s been difficult to watch the mounting frustration of the American people during open enrollment thus far. I know that the ACA is far more than a website. It has done so much to improve access to care for millions of Americans, and should be celebrated for that. But in the court of public opinion, the benefits it provides are being overshadowed by the less-than-stellar exchange websites. And that’s tough to swallow, especially when it’s so obvious that the new policies and subsidies could have been offered via the existing sales platforms, probably with much greater success and more focus on how much better the market is now that the ACA has reformed it.
But hindsight is 20/20, and the exchanges are part of the process now. And with time, they will be fixed. Although the dramatic consumer protections that the ACA has brought to the individual market (both on- and off-exchange) have been overshadowed lately by the disastrous launch of the exchanges, I believe that as time goes on and the website issues are repaired, we’ll be able to focus more on how much better the policies are in the individual market, and how much more accessible they are to people with limited incomes and/or pre-existing conditions. The ACA makes health insurance better. But the problems with the exchanges have made it tough to see the forest for the trees.
experience than the exchanges. That’s because those brokers can also show clients off-exchange plans, which provide more options for people who know that they won’t qualify for a subsidy (people who do qualify for a subsidy should limit their shopping to exchange plans, because the subsidies are not available outside of the exchanges).
