On Thursday, the US Department of Health and Human Services announced that there would be federal grants of $1 million to help for each state to set up the health insurance exchange. Each state is then going to be able to set up the exchange how they see fit. The idea is that the Gov sets up the market place and then the private market competes.
New Mexico’s wants to develop “a strong Exchange that promotes competition between plans based on quality and price in a way that is transparent to consumers.” This is an interesting approach because this could include restricting plans from the Exchange that would exceed specified premium levels or by requiring cost initiatives of plans participating. So it looks like New Mexico will decide what carriers get to participate in the exchange.
As states start to develope the exchanges the orginal view that the exchange would act as a market place for carreirs to compete with guarnteed issue plans. Now the big question is what will a plan in the exchange cost?
Sept. 1st we will see many stats launch their high risk pool plans. Ohio has released details of their high risk pool plan and it was reported that they would only be able to insure 5000 of the 17,000 people that are eligible for the health plan. They are keeping premiums low $98 to $493 a month for nonsmokers and $98 to $642 a month for smokers. The state of Ohio received $152 million in federal money to pay for the new program and time will tell if that is enough. The first red flag that this program is under funded is that Ohio can not offer to the full 17,000 that need it.