Next Oct. 1, Washington residents will begin enrolling in a Health Benefit Exchange that will provide many with medical insurance for the first time in their lives.
Within three years, a projected 500,000-plus will no longer have to consider a hospital emergency room their medical home. And if they do show up there, hospitals will no longer have to eat the cost of unpaid care. Those costs are eventually passed along to those with insurance, who pay premiums higher by as much as $1,000 to offset losses now shouldered by hospitals and doctors.
Washington has been among the states furthest along toward getting an exchange up and running, for which it has been rewarded with more than $150 million in federal grants. Designing and implementing an exchange that will enable consumers to compare health care plan features and costs, allow insurance companies to determine eligibility and premiums, and the government the amount of subsidy has been a prodigious process. But, once in place, eligibility could be determined in 15 minutes instead of days.
Consumers save. Insurers save. The newly renamed exchange, the “washington healthplanfinder,” promises consumers will “click. compare. covered.”
But it’s hard not to feel guardedly optimistic after reading through a Dec. 1 report to the Legislature on projected exchange costs, and possible sources of revenue.
Exchange operations are expected to cost about $50 million annually, which would be funded with either a levy on all health insurance premiums, or premiums only on policies purchased through the exchange. The money could also be had by taking a slice of the increased revenues from the 2 percent premium tax already in place.
Another option: Assessing hospitals that have been losing $1 billion because of uncompensated care.
The cost per enrollee is expected to be 20 percent lower than for the Massachusetts exchange established, then orphaned, by then-Gov. Mitt Romney. Massachusetts was the model for Obamacare.
It also looks as if the assessments will be lower than the 3.5 percent “user fee” that will be imposed on companies that participate in the federal exchange, which will be a catch-all for states who decline to establish their own. The more who enroll, the less the cost of running the system.
Although there are plenty of uncertainties to be resolved, there are indications insurers who fought Obamacare are slowly coming on board. They will, after all, gain millions of new customers.
Enroll America, backed by companies such as Aetna, plans to spend $100 million to educate the public about the exchanges and how to use them.
The Obama administration, meanwhile, Thursday said health care reform has already saved consumers $2 billion in drug and other costs.
It will take a lot more than that. If health care cost increases cannot be staunched, reform will fail.
The success of the exchanges will be pivotal.