Thursday, May 10th, 2012 - 17:46
Thursday, May 10, 2012 - 17:14
Analysis recommends limiting number of choices.
According to a report from The Hill, the new state based health insurance exchanges would best serve consumers by limiting the number of health plans offered. Based on a recent analysis from the health policy journal Health Affairs, individuals purchasing insurance on the new Exchanges would find it easier to survey a smaller menu of options along the lines of the Massachusetts model. Such a model relies on the state to take an active role in choosing plans, negotiating on behalf of consumers, and dictating the terms of coverage.Such a model might also find support in that the "paralysis of decision making" concern when consumers are faced with too many options.
Some observers, especially some on the Right, have advocated for a paradigm more aligned to Utah's Exchange. Utah allows all plans that meet a minimum threshold to participate on the Exchange. The Utah model allows for more choices, and presumably more competition. Competition is a major problem in state-based insurance markets. In some states, only a few insurers control a majority of the market. Restrictions on the number of companies offering insurance on the market would theoretically inhibit competition and hold prices higher.Another option might be for states to work with insurers to create straightforward health plans that are easily comparable on a standard set of criteria.
Numerous plans could then be effectively compared based on cost and quality without limiting the number of participants.