Reality #6 – Exchange Board will Limit Insurance Choices

Among the far-reaching powers granted to the seven-member MN Health Insurance Exchange board in the proposed legislation is the power to choose what health insurance plans you, the consumer who may be forced to buy insurance on the Exchange, are allowed to purchase.

This unprecedented power has been the subject of many debates at the State Capitol.

Supports say this “active purchaser” model would be better than the “clearinghouse model.”

The “active purchaser” models would allow the Board to pick and choose health plans from certain providers according to criteria the Board selects. The “clearinghouse” model would allow any insurance plan that already meets the “qualified health plan” requirements of the federal government to sell their plans on the Exchange. The Board would have no say in the matter.

Many legislators and groups claiming to represent consumers (not CCHF) say that the active purchaser model should be used. They claim the clearinghouse model would bombard consumers with too many choices. They say the Board can and should decide what plans are in the “best interest” of exchange enrollees.

During one debate, a Democrat legislator in support of giving customers a list of “manageable” choices claimed that if she went to a grocery store and found too many soup choices, she might leave without soup. A Republican countered that no matter how many choices there were, he’d leave the store with soup because he was hungry.

Choice is one of the hallmarks of freedom. In contrast, recall how East Germany limited the choice of car to the infamous Trabant, which Time magazine once called one of “the 50 Worst Cars of All Time.” It was the only car available, and people had to wait years to get it.

Americans make choices every day whether at the grocery store, buying a cell phone, picking out clothes for our children, or buying insurance for our cars and homes.

A Minnesota health care reform law passed in 1992 has already limited health insurance choices. This legislation would further limit insurance options.

An estimated 1.3 million Minnesotans will be enrolled in the government’s exchange by 2016.  Many will have no where else to go for insurance. Many will be middle-class individuals who simply lost their employer coverage or want individual policies. Limiting health insurance options on the exchange could limit their access to low cost, high quality health insurance.

Minnesotans forced onto the government exchange should not be further limited by a lack of meaningful choice in health insurance options.  This only adds insult to injury.

Coming Tuesday: Reality #7