What We Do (and Don’t) Know About Health Insurance Exchanges

The rules around health insurance exchanges are dynamic and evolving all the time. Some agents fear these exchanges could displace us-in the way Travelocity displaced many travel agents. Others argue that because health insurance is a far more complicated purchase than an airline ticket, and because consumers are likely to be confused by these new channels, our expertise and advice will be even more crucial.

Hopefully, the role of agents will become clearer as time goes on. In the meantime, here’s an overview about what we do-and don’t-know about health insurance exchanges.

Health Insurance Exchange: A Definition

A health insurance exchange is an online marketplace where individuals and small businesses can shop for, compare and purchase health insurance. Think of it as an Expedia or Travelocity for health insurance. No one is required to use an exchange; it is an additional channel being added to the marketplace.

Some states, including Colorado, where Alliance Insurance Group is based, are taking the initiative to build their own exchanges, which are permitted by federal law but subject to certain guidelines. States that choose not to create their own exchanges by 2014 will be required to use the federal exchange.

States building their own exchanges typically cite the desire to control their own destiny and customize their exchange to the needs of the local population. States that have rejected exchange proposals often mention their reluctance to support any aspect of the federal reform bill, which they hope will be repealed by the Supreme Court.

In general, insurance exchanges allow consumers and small businesses to:

Shop for and compare health plans, which must include certain standardized benefits.
Determine eligibility for premium relief in the form of tax credits.
Call or sit down with someone who can help explain various benefits and plan features.
Enroll in a plan.

Following are some of the most relevant aspects of the health insurance exchanges for independent insurance agents.

Consumer Access to Agents

The National Association of Health Underwriters (NAHU) is lobbying for the inclusion of an agent-contact option within the exchanges’ online systems. This could be structured similarly to the national Web-based portal for home sales, which presents listing information in a standardized format, but also connects potential homebuyers with a state-licensed realtor.

Importance of Certification

NAHU also believes all agents participating in the exchanges should be required to pass an annual exam that addresses private coverage, public assistance and subsidy-eligible options to ensure familiarity with all coverage choices available to consumers. This knowledge is important for agents as well as individuals filling the new role of “healthcare navigator.” Navigators will receive federal funding to help educate the public, distribute information about enrollment and premium credits, and provide enrollment assistance. NAHU believes navigators duplicate the role of licensed agents and questions the wisdom of spending federal money on these positions. But if navigators are used, they should be subject to the same rigorous licensing and continuing education requirements as agents.

Healthcare Tourism: An Eye Towards The Future

The healthcare tourism industry has been witnessing a remarkable growth in recent years. There are a number of reasons for the continuous growth of this industry especially in the Asian and African countries. One of them being the lure of affordable medical care, along with the scope of enjoying the scenic beauty of tourist destinations. One of the renowned experts, Marvin Cetron, founder and president of Forecasting International, have marked the growing trend of medical tourism and expect it to pose a serious challenge to the Western healthcare industry in the near future.

It is necessary to have a glance over the Western medical or healthcare scenario in order to have a clear picture of the kind of competition that can crop up between the former and the Third World medical tourism industry. In some undeveloped regions of the world, the medical facilities are hard to come by, whereas in other countries, the public healthcare system is so overburdened that it would take years to get needed care. For instance, in countries like Britain and Canada, the waiting period for a hip replacement surgery can be more than a year; while in Bangkok or Bangalore, a person can find himself in the operation theatre just after landing the very same day! Not only this, the cost involving the total process is much less than that charged in Western countries. For example, a heart-valve replacement that would cost $200,000 or more in the U.S. costs a mere $10,000 in India that includes round-trip airfare and a brief vacation package as well.

Doubts are often raised regarding the quality of service offered by medical tourist destinations. But such arguments have no solid ground as the facilities and services offered by them are almost equal or even better than the Western medical services. There are hospitals and clinics that cater to the tourist market that are often among the best in the world. Most of them staff physicians who have received training from famous medical centers in United States or Europe. Bangkok’s Bumrundgrad hospital has more than 200 surgeons who are board-certified in the US, and one of Singapore’s major hospitals is a branch of the prestigious Johns Hopkins University in Baltimore. Statistics suggest that the services offered in some of the leading medical tourist destinations often exceed their Western counterparts. As for example, the Escorts Heart Institute and Research Center in Delhi and Faridabad, India, performs nearly 15,000 heart operations every year, and the death rate among patients during surgery is only 0.8 percent–less than half that of most major hospitals in the US. These figures are enough to clarify whatever doubts some skeptics might have on their minds.