Problems That Health Insurance Exchanges Could Create

However these Exchanges are riddled with certain intrinsic problems that have encouraged the skeptics to doubt the effectiveness of these state based insurance platforms. Here is a look at how these Exchanges can turn into complete disasters if the problems are not dealt with immediately.

States are eligible to almost a never ending supply of federal funds to set up these Exchanges. This move by the central government is to encourage the states to build their own Exchange. However, none of the states have the experience of building one before and the no dearth of funds allows states to experiments. This could mean a considerable amount of federal dollars going down the drain. The economic condition of the country and does not allow for such extravaganza. If the federal government does not keep a tab on the spending, the Exchange could prove to be a highly costly affair.

The central idea behind setting up an Exchange is to foster competition and to give more choices to the residents. But the strict guidelines could prove to be big deterrent and could drive away the insurance companies from being a part of the Exchange. This will result in the residents having fewer choices on the state platform and perhaps access to only government backed plans. This will complete defeat the purpose.

Another major concern is the guideline that the companies should have their cheapest plans on the health insurance Exchange. This will force the companies to cut down on the facilities they offer on plans that are bought through the Exchange. Though residents will have access to cheap plans, they will be second-rung at their best and offer only limited benefits. Such plans could turn out to be actually more expensive than some affordable health plans available outside the Exchange.

There are also fears that Exchange will function as any other government organization – pay scale of employees matching government standards, fixed work timings, weekend and other government holidays- interaction between the residents and the Exchange staff will be limited to non-holiday weekdays and only during the working works. The quality and efficiency of the staff employed in the Exchange is also under the scanner.

The federal reforms hope that the health insurance Exchange will revolutionize the way health plans are bought and sold in this country. However, if these teething problems are not fixed soon enough, then the these government based online platforms will end up doing more harm than good.