Research Paper on the Current Status, Requirements, and the Future of Insurance Exchange

Introduction

Most of the Americans have identified healthcare as a significant issue of concern. In order to address the multiple challenges associated with the access and affordability of the healthcare services, the government in collaboration with other stakeholders in the health sector has tried to make various reforms that have changed the current status of an insurance exchange, the requirements, and may probably change the future of the insurance exchange. Health insurance exchanges involve various insurance plans designed to make health insurance accessibility and affordability possible for millions of Americans. Medicare and Medicaid services are the centers of the health insurance exchange that are designed to assist Americans who have previously faced barriers in the insurance market. The aim of this research is to discuss the current status of health insurance exchange, the requirements, and what the future of insurance in the United States might include.

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The Current Status of Insurance Exchange

Health insurance exchange, also known as health insurance marketplace includes organizations in every state in America through which Americans can purchase the health insurance services (Zallman et al., 2015). The health insurance exchanges have expanded its coverage across all the states in America while creating a cost-efficient marketplace where insurers can compete and also enable them to comply with the policies such as the consumer protection laws (Wong et al., 2015).

Currently, the issue of health insurance exchange has become the mainstream of conversation in the last few years. The creation of the Affordable Care Act in 2010 led the creation of two main insurance plans, managed care and Medicaid (Burke, 2014). Despite the attempt to provide a continuum of affordable health insurance plans to millions of Americans who cannot afford insurance coverage from the government and their employers, legal issues have influenced the implementation of the managed care and Medicaid plans in various states across America (Jost, 2009). The managed care plan aims at providing the members with affordable and quality care at reduced cost. The managed care is a delivery system that manages the cost, utilization, and quality of the healthcare delivered. The system provides its members with the healthcare benefits and other services through a contracted arrangement between various stakeholders (Jost, 2010). The stakeholders include the Medicaid agencies and the managed care organizations. The contracted arrangement between the stakeholder agencies and organizations set a rate in which the services are purchased. The set rate is accepted on how much a client should pay per month (capitation) for the services. This is an attempt by the states to reduce the Medicaid program cost and effectively enhance the management of utilization of the health services across all the states in America. Both managed care and Medicaid plans aim at improving the health plan performance, enhancing the care quality and its outcomes (Baicker et al., 2013).

Some states have started to implement the program, while some still argue on the legality of the program. The managed care program by 2014 had enrolled over 55 million people across different states in America (Burke, 2014). Among the states that have tried to implement the program include California, New York, Los Angeles, Oregon, and Washington D.C. The Affordable Care Act advocated for the state-based insurance exchange; however, this has not been the case as it has received criticism from various critics. Although the state laws provide the states with the option to either create their own insurance exchange plans or depend on the federal system on the department of health and human services, not all the states have complied with the Affordable Care Act (ACA). Burke (2014) argues that by October 2013, over 15 states had approved to establish on state-based exchange system that allowed both individuals and small business exchange. Some states have tried to reform the insurance systems; however, as Burke states, any changes in the insurance system lies at the center of the ACA. Rankey (2012) explains that the ACA of 2010 was created with the aim of establishing an insurance exchange system that could facilitate the purchase of affordable and qualified health plans. Rankey (2012) further explains that the exchanges were expected to reduce the cost of healthcare by promoting competition among the insurers in the exchange market. According to Rankey (2012), proponents of insurance exchanges believe that increase in transparency in the insurance delivery systems will enhance competition that is most likely to facilitate the technologic innovation and improved high-quality care purchased at a lower cost. The practical implementation of the insurance exchanges has varied with the states. This has, in turn, resulted in questions of the role of the exchanges.

The managed care continues to find itself under different attacks from almost all sides due to the problems associated with the health sector in the USA. Consumers complain about the negligence of some parts of the healthcare plans (Baicker et al., 2013). The states that should be responsible for the implementation of the healthcare insurance plans also have taken another stand against the plan. Providers also complain of the unsustainable reductions in the compensations in the health insurance plans. As Sehkri (2000), the managed care could be able to withstand all the criticisms from almost all sides if only it was making profits. Although the enrollment in the managed care has continued to rise, the net income of the majority of the stakeholder organizations continues to reduce. The US government spends almost 45% of the overall health expenditure on purchasing the health insurance services for a specific population such as elderly, disabled, and the poor. However, the majority of the population in America benefit from insurance services provided by their employers. However, this leaves around 40 million who are not covered by the employers (Sehkri, 2000).

Various challenges have minimized the effectiveness of ACA and establishment of state-based insurance exchanges. The ACA has become another political battleground for the democrats and republicans. The battle started with the creation of ACA in 2010 when some states went to court and filed a federal lawsuit in an attempt to overturn the implementation of ACA (Buchmueller et al., 2013). The Supreme Court ruled that the ACA implementation was to continue. Despite getting the directive by the Supreme Court to continue with the implementation of the ACA, some of the 27 states that joined the federal lawsuit to challenge its implementation have become reluctant in creating their health insurance exchanges. (Barry et al., 2012) With the introduction of the new administration under the leadership of President Trump, the Republicans saw the opportunity to repeal and replace the ACA. Initially, the states were confined to the two options that they were expected to operate the insurance exchange on. The two options include the state-based exchange and the federally-facilitate exchange. However, various reforms in the health sector have created the third option for the states to run the insurance exchanges in partnership. Another option was created in 2014 that allowed states that want to run their insurance exchanges while relying on the economies of scale of the federal system as well. Although some of the states have still refused to implement the insurance exchanges involved in the ACA of 2010, the majority of the states have taken the stand of creating their own insurance exchanges (Barlas, 2013).

The insurance coverage, cost, and access of healthcare services in America have been a challenge to many people who comes from the low-income families. Medicaid has significantly helped to enhance the accessibility of healthcare services especially by those who cannot afford the expensive insurance (Rowan et al., 2013). Rowan et al. (2013) explain that among the people with health problems, the insured are most likely to seek medical assistance from the healthcare institutions, while the uninsured are most likely to use human services or alternative medicine because they are unable to finance the insurance plan. Insurance exchanges aimed at improving the lives of low-income houses across all the states in America. Before the enactment of ACA in 2010, even among the insured, the cost was still a barrier to receiving quality and better healthcare service (Rowan et al., 2013). It is because the cost sharing disproportionately influenced the medical access especially for the people from low-income households. According to Rowan et al. (2013) the Medicaid managed care aimed at facilitating the insurance exchange that provides options for all people with incomes at or below 138% of the federal poverty level to access healthcare services at a reduced cost (Rowan et al., 2013).

Requirements of Insurance Exchanges

Health insurance exchanges in the United States are agencies and organizations that organize the market for the health insurance service providing organizations (Jost, 2010). As a result, each of the insurance exchange must work in line with the requirements by the policymakers. Again, the members seeking to purchase the insurance package plan must also work in line with the requirements or directives provided in the market by the insurance exchange firm. Medicare plans started as early as 1965 with the inception of the health maintenance organization (HMO). The Medicare program had been only using the prepaid plans (Sekhri, 2000). However, amendments that were later carried out in the Medicare service delivery programs ensured that the requirements changed in the insurance plans. Further, the enactment of the ACA of 2010 facilitated the changes that accompanied different requirements.

The current health insurance exchanges are required by the state law to be created under the Affordable Care Act (ACA). The state-level insurance plans are expected to significantly help improve the health service delivery and access throughout the United States (Reisman, 2015). Although the new insurance exchange market was created with the aim of enhancing the accessibility of insurance plans to a large population that do not receive insurance coverage from either the employer or the government, it also assists those who purchases the insurance plans by themselves. Under the federal government, the insurance exchanges are expected to have the ability to provide emergency services for 24-hours and with reasonable promptness (Barlas, 2013). The expansion of the insurance coverage plan helps to improve the quality of healthcare at a reduced cost.

Again, the insurance exchanges are expected to have the ability to bear the risks and carry out the administrative functions effectively. The decisions made by the states based on the governance of exchanges have a fundamental impact on the exchanges success. The ACA of 2010 highlights the government requirement that states should consider while creating their own insurance exchange. For instance, the Act requires the exchange program to be governed by a governmental agency or nonprofit institution that is created by the state (Jost, 2010). The ability to bear risks depends on the programs ability to sustain itself in the market. The requirement is highlighted under section 1311 of the ACA that cites that the exchange program should be able to establish a self-sustaining mechanism (Jost, 2010, p. 17). This can include the user fees charges or another way to generate the funding for the agency. Various states have complied with the requirements including the Mass...