The Impact of Health Benefit Exchanges

The Impact of Health Benefit Exchanges

Health care and health insurance are huge topics in the news today. As costs for both patients and medical professionals continue to increase, new ideas are being tried to improve the situation for all parties and address the problems that healthcare is currently facing. One such solution is the health benefit exchange, part of the federal government`s initiative to make healthcare affordable and accessible to everyone.

Basically, the exchange is a pool of uninsured people in a given area, such as the same state, who bargain together with healthcare insurers for rates. A health insurance provider will give a group of people a better rate and benefits than they would give to a single person applying for coverage just for themselves. This is because when people are grouped together, their risks and premiums are also pooled together, lowering the cost for everyone in the pool in most cases.

Under the federal act, states will handle negotiations with health insurance providers and the providers must follow the rules set forth in the act regarding coverage and prices. People who are not insured or pay too much for their insurance through their employer may be eligible to participate in the pool and lower income people will receive assistance with the cost of the pool premiums.

Currently, it`s impossible to determine exactly how the benefit exchange will impact the healthcare industry. Ideally, with more people covered by health insurance, overall cost will eventually go down. People who don`t have health insurance or who are under-insured often add to the inflation of health care costs because by the time they get medical care, their problem has advanced and become more expensive to treat.

For example, a person with an infection who can`t go to the doctor to get a prescription for antibiotics may end up in the emergency room and hospitalized if the infection spreads. The infection, at the beginning, may have been treatable with an inexpensive medicine, but once it spreads, the person could end up in the hospital for days, needing care they can`t pay for that costs thousands of dollars.

With more people having access to insurance, death rates may go down and disease survival rates, such as the rate of survival for cancer, may go up. Many diseases and disorders need to be caught early to be effectively treated and a person who doesn`t have health insurance often does not have preventive health care.

Drug costs may also go down as a result of health benefit exchanges. If more people are buying medicines, it creates a bigger market for competing pharmaceutical companies to create generics. The government does oversee drug profit margins to a certain degree, so an influx of new customers could drive current drug prices down.

One of the potential downsides of the health benefit exchange in the healthcare field is lack of medical professionals. With everyone having coverage, doctors and hospitals may become overwhelmed. Appointments may take months to get if there are not enough medical professionals in all fields available to treat the new influx of patients. Recruitment and government incentives for students in the medical field can help ease this problem but will take time to show results.

Another issue with the health benefit exchange is the cost to health insurers, employers who pay for employee coverage and the health insurance providers themselves. The creation of the exchange resulted in administrative costs and is expected to inflate health insurance and medical costs in the beginning stages. The initial costs should be offset in the future, as health care costs are driven down, as long as the exchange works properly.

People who do not get health care will be penalized on their taxes, but this penalty has not yet gone into effect as most exchanges are still not completely up and running. As devised by the government, lower and lower-middle class people will receive subsidies and tax rebates designed to offset the cost of their premiums through the exchange. Both the rebates and the determination of whether a currently insured person`s premiums are too high are calculated based on the person`s income in relation to the federal poverty level percentages.

The health care industry in general must mobilize itself and be prepared for the influx of new patients under the new system. Health care insurers will need to expand administrative support in order to efficiently handle the newly insured people added to their rolls.

Online pharmacies may help to ease some of the burden of the changes brought about by the benefit exchange system. If people are able to get prescriptions filled by an online chemist, for example, it means less foot traffic in already burdened physical pharmacy locations. Emergency care centers, which act as “mini” emergency rooms, can also ease potential hospital traffic.


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