It would be a "travesty" if Pennsylvania and other states, in a fit of political pique, decline to set up their own health insurance exchanges under the federal health care reform law, a key architect of the national exchange strategy said Thursday in Upper Saucon Township.
Joel Ario, speaking Thursday at the Greater Lehigh Valley Chamber of Commerce's annual health summit at the Saucon Valley Country Club, touted state exchanges not because the law is perfect, but because the states are "speedboats" of innovation.
Likening the federal government to a lumbering ocean liner, Ario -- a former Pennsylvania insurance commissioner -- said that when he was overseeing the exchange program in Washington, he demanded that federal bureaucrats limit the government's role in establishing them.
"I started thinking of the states as speedboats, racing around, zig-zagging, trying things, failing, trying something else," he said. "That's why it would really be a travesty if states don't actually step up and do their own exchanges, because they will be so much better at it than the federal government can be."
Exchanges are a key part of the Affordable Care Act, also called Obamacare. They will be actual and virtual places where consumers can go to shop for health insurance -- think of them as the Expedia of health insurance -- and officials expect that the pressure of the marketplace will drive insurers to create quality plans at affordable rates.
Some states are well on their way to completing their exchanges. Pennsylvania, however, is not one of them. Although the state took more than $33 million from Washington to establish its own exchange, it is still very much a work in progress.
Ario, managing director of Manatt Health Solutions, noted that Pennsylvania Insurance Commissioner Michael F. Consedine has complained that the federal government left too much up to the states to interpret.
Gov. Tom Corbett, visiting the Lehigh Valley last week, said he was waiting for the election before making a decision on whether Pennsylvania will operate its own exchange or whether it will use one imposed by Washington.
Clearly the election will shape what happens next, since Republican Mitt Romney has said he would move to repeal Obamacare if elected.
But even if that is the case, Ario told the chamber it's unlikely that some states will choose to do nothing, while others are poised to reap the benefits of their own exchanges, supported by federal dollars. Besides, he noted, ideas such as the individual mandate and the exchanges were promoted by Republicans.
"This is the right middle solution," Ario said.
If the exchanges work the way he anticipates, Ario said that over the long haul, people will prefer to go to them in a "slow evolution" away from the current system of employer-provided insurance.
Ario had support in the room for exchanges, said Tom Huntzinger, chairman of the chamber's Healthcare Legislative Committee. The chamber has backed exchanges, but it doesn't like the fact the health care law doesn't address medical liability reform -- something Ario said President Barack Obama and Mitt Romney support -- nor does the chamber like the mandate to purchase insurance, he said.
But Ario said the system collapses without broad participation. Otherwise, he said, healthy people will only buy insurance after they get sick and the system becomes one large high-risk pool.
He also said that even though it doesn't take full effect until 2014, Obamacare is moving health care away from the fee-for-service system that has made U.S. health care the most expensive in the world, but far from the best according to outcomes.
Insurance companies pay lots of money to cover the health effects of smokers' habits, but until the Affordable Care Act, they had no incentive to fund wellness programs such as smoking cessation, he said.
The government also now rewards hospitals for quality outcomes and penalizes them for readmissions. Ario said top health systems such as the Mayo Clinic and the Cleveland Clinic have become "very disciplined about identifying best practices and implementing them."
The exchanges and the shift toward rewarding quality outcomes will also help by having patients and providers put "skin in the game," he said.
States have until Nov. 16 to submit proposals for their exchanges, Ario said. Besides choosing to do nothing or setting up their own exchanges, states like Pennsylvania may apply to use the federal option for a year or two before running their own operation, Ario said.
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