Originally Posted by Pawnmower
In my understanding the exchanges are just going to be a market where PRIVATE companies products (their health care line etc) can be compared and shopped for by consumers.
The exchange is just a way for private citizens to join together to get group rates, which are cheaper than a lone person.
The 'efficiency' is going to be the private companies issue, and I have faith in private companies that they will compete and find ways to succeed.
In order to set up exchanges, there will undoubtedly be systems and processes, and because you have one central entity managing over 26 states with entirely different rules and regulations, you have to set up different systems and processes, systems, and IT requirements. Not sure what your career background is or if you've project managed a project like this. But this is a mammoth of a project. Insurance companies have been trying to crack this code for years, and they have experience doing this.
That's only just to get a tool up and running. From there, you have to have service people to troubleshoot, a marketing group to promote and help educate on the tool, data analysts, project managers, finance/ops, strategists, etc... not to mention multiple managers to watch over these things. Worse, because the pay isn't going to be very good, you're going to get lower quality talent unless you contract to a consultancy, which will be expensive.
They have these things in auto insurance. They're called comparative raters. They are very complex technical systems, and there is a heavy strategic component to it. It takes a ton of people and resources to build these systems (especially across state lines) and to maintain them.
I don't think exchanges are a bad idea. Transparent pricing is a good thing and did revolutionize the car insurance industry. But politicians are NOT business people. I can guarantee you the cost of stupidity and waste is going to be off the charts. I am upset that they didn't instead consider a trigger-based option, which I think was on the table. They should have given private sector insurers 5 years or so to come up with a solution of their own. They would have done it cheaper, more efficiently, and more effectively.