Insurance Exchange

One term that is floating around in the health care debate right now is an insurance exchange. The idea has been compared to the stock exchange in something I read. At the stock exchange you can trade all stocks. At an insurance exchange it would be an easy way to make available and, with the right information, compare different insurance products. It would also offer an opportunity for pooling risk.

What is interesting is how this is being portrayed on the two sides of the debate. On the one hand, some single payer advocates are saying that the for profit insurers will have an opportunity to exert too much control over the regulation of the exchange. They would set up a system by which they could market to and attract the best risks. That would leave the higher risks for the government. The government program would then become more expensive and in a few years the private insurers could make the claim that the government really can't manage a cost-efficient program.

On the other hand, you have a variety of parties making the argument that this is just a step to single payer. That the government will set rules to favor the government plan and that private industry will then be pushed out of the insurance market.

I'm sure that each is possible. If we don't go to a single payer plan immediately, it would be nice if we could actually create a plan by which we would have healthy competition. Mark Pauly in a recent editorial (NEJM, 2009; 360(22): 2271-3) suggested that if some people want to be insured by the government that should be a choice as long as the government plan plays by the same rules as the private plan. Similarly, as I mentioned yesterday, if different people want insurance plans that are more or less generous for certain types of care (e.g. not everyone wants a plan that covers chiropractic services) that should also be allowed.