As part of the health care reform package passed by President Obama, states were encouraged to develop their own health insurance exchange markets. According to David Weinstein of Cherry Hill, NJ, insurance exchanges were designed to make it easier for private individuals to find and compare health coverage options. If people found a plan that met their needs, they could simply enroll. Rather than waiting for an employer to provide health insurance programs, an individual could shop for and buy a plan alone, and get needed coverage without any form of outside assistance.
When these exchanges were first unveiled, according to David Weinstein, health insurance looked remarkably easy to obtain. In the months that followed, however, the exchanges came under deep fire and some faults in thinking seem to have come to the surface.
For starters, says David Weinstein of Cherry Hill, NJ, insurance is a product that has traditionally been regulated at the state level. Since the late 19th century, states have enacted laws that dictate what sorts of procedures must be covered and what sorts of procedures can be excluded. These dictates can vary widely from state to state, and sometimes, the guidelines for one state seem to directly contradict the guidelines used by another state. Untangling this confusion can be incredibly difficult, and in order to avoid increasing hassle, it was decided that the insurance exchanges would only be held at the state level. In other words, says David Weinstein, the insurance exchanges don’t cross state lines.
This can cause an extreme amount of inefficiency. If the plans were allowed to cross state lines, says David Weinstein, health insurance overhead costs would be dramatically reduced. There would be only one system, with one set of employees, rather than 50 competing systems with 50 sets of employees. The waste that’s allowed with a state-run system is simply staggering.
In addition, some states have expensive rules regarding health insurance, David Weinstein says. They may mandate expensive procedures that other states don’t require, or they may simply have expensive testing requirements that are deemed unnecessary in other states. If exchanges were run at the state level, these discrepancies could be identified and removed, says David Weinstein of Cherry Hill, NJ. Insurance rates could go down all across the country as a result.