Texas- Struggles With Task of Setting Up Insurance Exchange

Comparison shopping is often confusing because most health insurance companies offer a smorgasbord of plans with annual premiums that can fluctuate depending on the costs of their medical services each year, frequency of use and other variables. One plan, for example, may be cheaper than another but cover fewer services and prescriptions. An exchange like the one operating in Massachusetts, on the other hand, would make it “easier to understand your options, understand the differences between them and make a choice,” Schwartz said.

Under the new health care legislation, each state would determine the level of services and benefits insurance carriers must provide to consumers. But a basic health coverage package, known as essential health benefits, is designed to assure consumers that at least minimum benefits are provided by every insurance company participating in their state’s exchange.

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Consultants for the exchange planners in Texas estimate that 1.7 million people would purchase insurance through the exchange. That creates a huge market for Aetna and other insurance companies that want to offer new health insurance plans through the exchange.

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Tom Banning, CEO of the Texas Academy of Physicians, is among those doctors and Texas hospitals that expect patients and caregivers to benefit from the creation of health exchanges.

“Ideally, the individuals with insurance will become more sophisticated users of health care and health insurance and focus on preventive measures so those more acute problems are addressed early and at less cost,” Banning said.

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Proponents say exchanges will create more competitive pricing.

“Better competition will help drive down insurance premiums, and that’s exactly what exchanges do,” said Blake Hutson, an Austin organizer of Consumers Union, a consumer advocacy group. “We need a new way to help families and workers, small businesses get health insurance and to help people who already have insurance but struggle with high rates. [A] health insurance exchange in Texas is the way to do that.”

Yet despite some of the advantages of a statewide exchange, Texas has not made any significant progress in establishing one. In the last legislative session, House Bill 636 — a bill to create the exchange — was held up in committee. Gov. Rick Perry made it clear he would veto bills creating the exchange.

The governor believes federal health insurance reform is “a misguided, unconstitutional and unsustainable government takeover of our health care,” said Lucy Nashed, his deputy press secretary.

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The new system is unsustainable, according to Harris, of the Texas Public Policy Foundation.

“All of these new taxes passed down to customers in addition to new insurance regulations are going to raise the cost of health care,” he said.

The cost of creating an insurance exchange is a concern to officials. The model specified by HB 636 would have cost $12 million annually in 2013 and 2014. Almost $4 million would have come from the state’s general revenue fund, and the rest would be funded by the federal government. Rep. John Zerwas, R-Simonton, author of the bill, says the model proposed by the bill has broad stakeholder approval and support.


http://www.dentonrc.com/local-news/local-news-headlines/20120301-texas-struggles-with-task-of-setting-up-insurance-exchange.ece
Hat Tip: Denton Record-Chronicle