Kansas Health Institute | Information For Policy Makers. Health for Kansans.

If you have health insurance, you know that purchasing it can be a complex and confusing process. If you’re fortunate enough to have a choice of plans, the array of benefits and options can make it difficult to decide which policy is best for you or your family.

And if you’re uninsured, but want to purchase health coverage, you may not even know where to start.

Kansas now has the opportunity to make buying health insurance easier for consumers, by creating a health insurance exchange for our state.

The health insurance exchange is an online, competitive marketplace that will be created under the Affordable Care Act and must be up and running by 2014. Through the exchange, consumers can make apples-to-apples comparisons of health insurance policies for a more streamlined and transparent purchasing experience. They will have information about policies in plain language, avoiding the jargon that often complicates the process and confuses consumers. The exchange may also require insurers offering policies to meet quality standards so consumers can have peace of mind knowing they are getting a good product.

The exchange creates larger pools of consumers, allowing insurance carriers to offer individuals and small businesses access to health insurance options currently available only to large employers. And through the exchange, Kansas consumers meeting certain income requirements can qualify for subsidies to help them purchase policies.

All of these benefits mean high-quality products and services at more affordable prices for Kansas consumers.

The Affordable Care Act leaves many of the details of these new insurance marketplaces to the states, so there are a number of decisions for Kansas to make between now and 2014. Under the leadership of Insurance Commissioner Sandy Praeger, Kansas has already been recognized as an innovator in efforts to create a health insurance exchange. We have a responsibility to ensure that these efforts result in a marketplace that serves the needs of those Kansans who will use the exchange, including individual consumers and small employers.

To keep this focus on the needs of the consumer, the Kansas Health Consumer Coalition, which advocates for affordable, accessible and quality health care for all Kansans, brought together a group of consumers and organizations representing the broader advocacy community. This group created a set of consumer-oriented principles to guide the development of the new health insurance marketplace in Kansas.

These principles, “Making the Kansas Health Insurance Exchange Work for Consumers,” embody a number of core values that empower consumers and place their interests front and center in designing and implementing the exchange. These principles include:

• Consumers must have an active voice in designing and overseeing the marketplace. As its primary users, individuals and small businesses know best the features and functions that will serve them.

• The marketplace must operate openly and with transparency. Open meetings, public reporting on information, process and key decisions, and sharing of data and analyses are necessary for a fair and equitable exchange.

• The marketplace should be operated by a non-profit entity outside of government, but in collaboration with relevant state agencies. A majority of the governing board should consist of users of the exchange and their representatives, including individuals and small businesses. The goal is clear: The marketplace must be inclusive, independent, and impartial.

• The exchange should maximize choice for consumers, but minimize confusion. Experience from the Medicare prescription drug program and other insurance marketplaces (exchanges are not a new idea or one that is unique to the ACA) shows that consumers value plan choice but can be overwhelmed by a large number of options. A balance must be struck to achieve choice, quality, and affordability for consumers.

• Finally, the marketplace must be fair. Younger, healthier consumers should not be steered to policies outside the exchange, leaving sicker, higher cost individuals in the exchange. This phenomenon, known as “adverse selection,” poses a significant threat to the success of any health insurance marketplace. The rules governing the market, both inside and outside the exchange, must therefore be consistent.

Kansas is off to a good start. We have a unique opportunity to design a health insurance marketplace that offers quality and value to Kansans and simplifies the purchase of health insurance. The principles embodied in “Making the Kansas Health Insurance Exchange Work for Consumers” are key to this process.

—Sheldon Weisgrau is the director of Health Reform Resource Project. Anna Lambertson is executive director of Kansas Health Consumer Coalition.