With less than three months until its go-live date, District officials say the city’s health insurance exchange is already functioning as planned by one important measure: prices.
City insurance regulators announced Friday that they have finishing granting approval to the plans set to be offered on the exchange, known as D.C. Health Link, starting Oct. 1. Four insurers are offering 301 different plans, and three of the four lowered their prices from their initial proposals after learning what their competitors were planning to charge.
Mila Kofman, D.C. Health Link’s executive director, said the pricing adjustments — made by Aetna, Kaiser Permanente and UnitedHealthcare — show the exchange is “absolutely already working to create real competition.”
“Insurance companies took a look at what their competition was going to do and made very strategic decisions about what they wanted their price points to be,” she said.
The rates, for plans that take effect Jan. 1, can be reviewed online.
For a “silver” level plan, offering moderate deductibles and out-of-pocket costs, a 27-year-old buying an individual plan can expect to pay between $184 monthly under CareFirst HMO plan up to $232 for an Aetna PPO plan. A 55-year-old buying the same level of individual coverage has options ranging from roughly $440 a month (Kaiser and CareFirst HMOs) to $555 a month (Aetna PPO).
Kofman said it is difficult to determine how the new rates compare to rates currently offered in the open market. The federal health-care overhaul, she noted, requires exchange-offered plans to meet minimum coverage requirements and to avoid discriminating on the basis of sex or pre-existing conditions. Those strictures do not currently apply, making an apples-to-apples comparison difficult.
But, Kofman said, “we’ve heard anecdotally from some of the brokers that the rates we’re seeing are much better than what they can get from their clients now.”
The rollout of the District’s exchange has been controversial at times, with a high-pitched debate about whether the city’s small businesses should be forced to purchase employee health coverage through the exchange. The D.C. Council voted in June to support the mandate, and Kofman credited that decision with helping to keep rates down: “There is no doubt in my mind that the only reason these insurance companies decided to lower their rates is what we did through the legislation,” she said.
Now competitive prices are only one piece of the puzzle of creating a successful exchange. Much will also depend on the technology, marketing and customer service components, which all remain under development. (Head on over to Wonkblog for an exhaustive look at the implementation struggles in a national context.)
But D.C. appears to be largely ahead of the game in rolling out its exchange and selling it the public. Tomorrow Health Link officials are holding two in a series of town hall meetings explaining and answering questions about the exchange. The first will take place from 10 a.m. to noon at the Turkey Thicket Recreation Center at 1100 Michigan Ave. NE; the second is from 1 to 3 p.m. at the Savoy Elementary School gymnasium at 2400 Shannon Place SE.