Close up of a medical insurance form with stethoscope
As the experiment for transforming the American health care system ensues, consumers face the potential for a disastrous outcome on October 1, when the marketplaces are supposed to be up and running.
As of a few weeks ago, the states were evenly split as to whether they will establish their own marketplace, or whether they will defer to the federal government to set it up.
For the most part, states led by Democrats have opted to set up their own marketplaces, while most Republican states have declined.
This will ultimately result in an experiment for the next few years of “Red Health vs. Blue Health.” The success of either option will depend on how effective the marketplaces are in terms of truly providing consumer choice, as well as their ability to provide consumers with the necessary information to make educated decisions.
As we’ve heard, many employers are bailing out by either reducing their staff to under 50 employees, or reducing hours to under 29 in order to not have to provide health care coverage. This will probably raise the number of people who will be accessing the marketplaces to purchase coverage.
The real experiment is whether the states, or the federal government, will be more effective in setting up the exchanges. With only six months to go, and many regulations still unfolding, the amount of chaos going on in the backrooms at the state and federal level is virtually unknown to the consumer. The expectation on October 1 is that consumers will be able to visit these marketplaces and make choices around health insurance similar to what they would do on Amazon.
The reality is this: Many systems that have to come together in order to provide consumers with the means to make these kinds of purchases is cumbersome, expensive and complicated. What further makes the situation ugly, is many of the firms that have been contracted to build these exchanges have absolutely no expertise or solution, which clearly articulates how these marketplaces will be built and will function.
Many large IT consulting firms such as Deloitte, CGI, Infosys and Accenture, are relying on a consortium of solutions and vendors who will collectively try to build the marketplaces.
At the state level, there are even greater challenges, since some Republican governors are trying to carve out situations where the federal government has some role, in addition to the state. The fact of the matter remains that each state is taking a different path where they will operate their markets similar to the way that employers buy health plans.
Each of these marketplaces though, will be very different in terms of how they function and the insurance carriers that are allowed to participate. Ironically, a recent Associated Press poll found that Americans prefer to have states run the new markets by almost 63 percent.
But clearly consumers have limited insight into the complexities of what is involved. Most Republican states, except for Idaho, Nevada and New Mexico, are taking a hands-off approach by allowing the federal government to take charge. While it seems ironic, it is more plausible those Republican governors that have opted to defer, may actually be calling the bluff of the federal government to verify their success.
After all, if the Federal Exchanges succeed, then the governors have kept their constituents happy. If the marketplaces fail, the states can blame it on the federal government, and they haven’t bankrupted their own budgets on the gamble.
The same argument, in terms of how health care will divide the country, applies to Medicaid. This week, as two budgets are presented, Rep. Paul Ryan, R-Wisc., will be reintroducing the idea of giving block grants to the states to let them decide how they are going to allocate the money, and expand Medicaid coverage.
The chaos created at the employer level could force more people into Medicaid and/or the exchanges, and you will soon find a fierce battle between employers and states as to who is going to pick up the tab.
In the middle of all of this is you, the poor consumer, who has been left at our own mercy to make the right choices about your health coverage and care.
As the states continue to battle it out with the federal government, employers, unions and other key stakeholders, a key fact remains that the estimated costs for what we have been told will be required to put these marketplaces up is underestimated, and the government will be back to the well in the next few months making a case for more money, potentially higher taxes to pay for an ever increasing tab.
At the end of this experiment there may be some winners who by chance were able to provide better coverage at lower costs, but it will be a long time before we know the true outcome of which market places actually worked because we will have 50 different versions to analyze with limited data to know the true result.
While the intent of the Affordable Care Act is to provide health insurance to more people at a reasonable price, it could very well be at the expense of shattering the very thread that binds the states as one.
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