Among the hoped-for benefits of Obamacare is improved consumer choice for small businesses and for individuals who aren’t covered by an employer health plan. That’s proving to be true here in DC: nearly 300 health plans will be available through the insurance marketplace, known as DC’s Health Benefits Exchange, beginning in 2014, officials announced late last week.
All four of the District’s major health insurers have indicated they will offer plans through the Exchange, totaling 34 plans for individual residents and 259 plans for small businesses. Specifics on rates, cost-sharing levels, and type of plans (HMO, PPO, etc.) will be detailed in a few weeks.
The large number of plans shows that the Exchange can act as the single point of entry for individuals and small businesses shopping for health insurance, while also providing robust choice to consumers. One-stop shopping online also is the best way to ensure price transparency and competition, which will stabilize prices going forward.
That’s why the DC Council should pass a bill, recommended by health experts and by DC’s Health Exchange board, to make the Exchange the sole marketplace for insurers to sell DC health plans to individuals and small businesses. The legislation, the Better Prices, Better Quality, Better Choices for Health Coverage Amendment Act of 2013, will benefit both individuals and small businesses, because allowing insurers to sell outside of the Exchange would reduce transparency and consumer protections. Having an “outside” market also decreases the ability for consumers to compare prices for all plans sold in the District, reducing competition for insurers, and increasing prices across the market.
The legislation also allows insurance companies to sell as many insurance plans as they want in the Exchange, so long as those plans are “meaningfully different” and meet federal and local consumer protections. This “meaningful difference” rule strikes a healthy balance between promoting choice among plans and limiting confusion among consumers, many of whom may not be able to tell the difference between two similar plans offered by the same insurer.
The proposal before the Council allows employers to delay entry into the Exchange until their health coverage runs out in 2015, giving time for employers to evaluate and transition to the Exchange. A longer transition, proposed by some, would make it hard for DC’s relatively small Exchange to reach its consumer-oriented goals: transparency, choice, price competition, and easy access.
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