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From Health Affairs:


The Bottom Line On Different Management Models In State Health Exchanges



Bethesda, MD--The Affordable Care Act gives states discretion as to how they design their health insurance Marketplaces. Some states run their own Marketplace; others are part of the federally facilitated exchange; and a few chose a state-federal partnership. All states have plan management responsibilities, and if a state runs its own Marketplace, it has management choices. A "clearinghouse" model of management is when all health plans meeting published criteria are accepted into the exchange. This model is used by some state-run exchanges and all the state-federal partnerships and federally facilitated exchanges. The alternative is the "active purchasing" model, allowing a state to directly negotiate premiums, provider networks, and other details. This model has been adopted by ten of the seventeen state-run exchanges. A new study, released today as a Web First by Health Affairs, found that in the 2013-14 open enrollment period, state-based Marketplaces using a clearinghouse model had significantly lower adjusted average premiums for all plans within each metal tier (bronze, silver, and gold) compared to state-based Marketplaces with active purchasing models. This study offers the first attempt to assess the premium differences across Marketplace models. 

State-Based Marketplaces Using “Clearinghouse” Plan Management Models Are Associated With Lower Premiums


By Kelly Krinn, Pinar Karaca-Mandic, and Lynn A. Blewett


All the authors are affiliated with the University of Minnesota, in Minneapolis.


This study will also appear in the January 2015 issue of Health Affairs.

To collect their data, the authors used information from the Henry J. Kaiser Family Foundation and The Commonwealth Fund to identify state policy choices regarding Marketplace governance and plan management strategy. The primary finding of this study--that state-based Marketplaces using clearinghouses were associated with lower premiums--might not seem surprising. However, "competition findings should be interpreted with caution, because during the first year of these Marketplaces there was substantial uncertainty about...expected health care costs," the authors concluded. "[O]ur baseline estimates provide a valuable benchmark for evaluating performance and state involvement in governance, plan management, and regulatory authority."


About Health Affairs

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically at The full text of each Health Affairs Web First paper is available free of charge to all website visitors for a one-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund. You can also find the journal on Facebook and Twitter. Read daily perspectives on Health Affairs Blog. Download our podcasts, including monthly Narrative Matters essays, on iTunes. Tap into Health Affairs content with the new iPad app.