What Expedia, Kayak could teach the ACA exchanges

Though the Obama administration has touted recent upgrades to the Affordable Care Act's online marketplace, one advocacy group says the exchanges still aren't living up their potential--and it has proposed a way to fix that.

Ahead of a briefing on Capitol Hill Wednesday, Joel White (right) of the Council for Affordable Health Coverage (CAHC) said on a conference call that reports about Healthcare.gov's current and forthcoming improvements are "missing the forest for the trees."

Most of these upgrades still lack the innovative solutions that consumers need in order to find a plan that works for them, White says. For example, he notes that the searchable provider directory that is still in beta testing by the government debuted in the private sector a decade ago. What's more, many state-based exchanges are struggling financially, he says, and the fees they charge health plans in order to list their products get passed onto the consumer in the form of higher premiums.

So instead of the government continuing to maintain a monopoly on the exchange business, CAHC wants to allow private entities to create "consumer-friendly shopping interfaces" which are similar to travel sites such as Expedia or Kayak that allow for comparison shopping," according to an accompanying presentation provided by the organization.

The plan would replace the centralized exchange system with real-time data extraction from insurance sites, allowing consumers to use their premium subsidies to buy insurance both on and off the exchanges.

"It really is something that could give greater flexibility to the consumer and have a side benefit of also allowing states and the federal government to farm out activities that they're not really good at," White said on the call.

In addition, CAHC's proposal would create a Paypal-like system that would calculate subsidy eligibility and store that information on a consumer's account, allowing him or her to purchase insurance from any website and pay any balance not covered by the subsidy with a credit card.

The proposal notes that plans would still comply with consumer protection laws--such as the ACA's essential benefits rules--and continue to be regulated by state and federal governments.

Noting that the 14 states that opted to run their own exchanges have already invested considerable capital in the endeavor, John Desser, vice president of public policy and government affairs for online coverage platform eHealth, added that CAHC's proposal doesn't do away with government exchanges.

"I'm not saying we should drastically change course," he said on the call. "But if you simply allow for more open competition … you'll see a natural increase in the involvement of the private sector, and I think it will simply become more efficient."

CAHC is not the first to suggest that public health insurance exchanges could learn from successful private sector companies. A recent Brookings Institute paper suggested that exchanges should offer an individualized plan cost calculator that uses algorithms like those employed by Amazon or Netflix to assess consumers' preferences and needs.

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