"it's all about HIM": Health insurance marketplaces on the eve of full implementation of the affordable care act and the conditions for their success

Central to the success of the Affordable Care Act is the innovative mechanism that is designed to provide access to commercial insurance and federal subsidies for individuals in families with incomes that make them ineligible for Medicaid and who lack employment-sponsored insurance, Medicare or other coverage. Following a review of the Health Insurance Marketplace (HIM, previously called “health insurance exchanges”) in the Affordable Care Act and relevant regulations, the paper canvasses the wide range of potential activities, roles and powers that HIM might assume in providing a digital venue for individuals and small businesses to purchase health insurance. Examples include solicitation of purchaser enrollment (ranging from passive to active), insurance carrier recruitment and qualification (“any willing seller,” vetting, restrictive recruiting), regulation of insurance carrier advertising (passive, lax, active), premium oversight (rate filing, review, regulation, premium aggregation), controlling insurance policy variation (none to very restricted) within the wide federal parameters, oversight of insurance carrier provider selection and reimbursement (none, minor, significant), and ACA-mandated selection bias adjustment (lax to severe). The analysis will then isolate those HIM functions that are critical for success. Preliminary results show that the most important conditions are the ability to communicate with the relevant publics, to commodify insurance purchasing decisions, and to force robust competition among participating insurers to restrain price increases. Finally, the conceptual framework is applied to available data to assess the likelihood that specific HIMs will succeed.