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The Real Obstacle of Health Insurance Exchanges: American Consumers

Philip Moeller

The new state health insurance exchanges are the cornerstone of the most important feature of the Affordable Care Act. The law aims to help millions of uninsured people get coverage in 2014, and the exchanges are the mechanism through which this will happen.

To meet the 2014 timetable, the state exchanges are supposed to be operational by Oct. 1 - in time for consumers to participate in the annual enrollment period for selecting next year's coverage.

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Even if federal and state officials were swimming in perfect harmony, achieving this objective would be difficult. And, of course, harmony is hardly a word associated with the contentious law passed in 2010. Many states, primarily those governed by Republicans, have decided not to set up their own exchanges but instead let the federal government do it for them. Another group is working on a series of partnership efforts with the feds, and a third group is building their own exchanges.

Meanwhile, a large number of states have rejected the law's large expansion of Medicaid insurance for the nation's poorest citizens. That option was created by last year's Supreme Court ruling upholding the overall constitutionality of the law. And that ruling has not prevented opponents from continuing to seek legislation that would overturn some or all parts of the law.

Beyond the enormous challenges to make the exchanges operational, the real obstacle might be the American consumer. More than three years after the Affordable Care Act became the law of the land, consumers don't understand it. The lack of knowledge is greatest among people without insurance and especially those with low incomes - precisely the groups most likely to benefit from the new law.

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While most of the law's massive regulatory measures have been written, the all-important component of consumer education has been put off until active implementation of the 2014 insurance requirement begins. That decision is a practical response to a relative lack of funding needed to promote and advertise the law's coverage features. But it places a lot of pressure on 11th-hour communication programs that have not yet been put in place.

Over the next several months, officials at several U.S. agencies will work to implement the steps needed to launch the exchanges. Mandy Cohen, a senior technical adviser at the Centers for Medicare & Medicaid Services, recently laid out key steps in a webinar hosted by the National Institute for Health Care Management Foundation:

June 2013: A call center will be launched to begin fielding consumer inquiries.

July 2013: The government will begin providing 10 to 15 hours of online training for consumer-assistance "navigators" and other information providers.

August 2013: The government will begin testing the program's Web portal. Much of the actual work done by the exchanges will be Web-based, and the portal's effectiveness will hinge on the launch of a government data hub. When an individual applies for health insurance through a state exchange, the data hub is supposed to automatically provide key tax, health and other information that determines an applicant's eligibility for federal insurance subsidies.

Oct. 1, 2013: The open enrollment period will begin.

"It's easy to lose focus on the consumer," health consultant Rosemarie Day says. She worked to help implement the state exchange that Massachusetts developed as part of its earlier expansion of health insurance. Based on that experience, Day says consumers need to see three to four plans that may apply to them rather than be overwhelmed by too much choice.

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Their top coverage priorities, she says, were to see a menu of standardized benefits for different plans they could compare easily, the monthly premium cost of the policy, the co-pays for doctors' office visits and pharmacy prescriptions, and to have their primary doctor included in the insurer's network.

In Massachusetts, repeated consumer outreach campaigns were essential to the program's success, Day says. For the upcoming launch of the Affordable Care Act, it's clear consumers are still not well informed. "Almost half of the general public is unaware that the ACA is still the law of the land," Day says. "So, there is a real knowledge gap there."

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