December 17th, 2014
The Affordable Care Act gives states discretion as to how they design their health insurance Marketplaces. Some states run their own Marketplace; others are part of the federally facilitated exchange; and a few chose a state-federal partnership. All states have plan management responsibilities, and if a state runs its own Marketplace, it has management choices. A “clearinghouse” model of management is when all health plans meeting published criteria are accepted into the exchange.
This model is used by some state-run exchanges and all the state-federal partnerships and federally facilitated exchanges. The alternative is the “active purchasing” model, allowing a state to directly negotiate premiums, provider networks, and other details. This model has been adopted by ten of the seventeen state-run exchanges.
A new study, released today as a Web First by Health Affairs, found that in the 2013–14 open enrollment period, state-based Marketplaces using a clearinghouse model had significantly lower adjusted average premiums for all plans within each metal tier (bronze, silver, and gold) compared to state-based Marketplaces having active purchasing models. This study offers the first attempt to assess the premium differences across Marketplace models.Read the rest of this entry »