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The baffling complexity of medical insurance

Lee Rozen
January 9, 2013
Moscow-Pullman Daily News

There's a suit in the courts that claims one of the "nonprofit" national health insurers conspired illegally to chop up the country so it gets markets where others won't compete, inflating its premiums and revenues.

True or not, it leads us to consider what the new federally mandated health insurance exchanges might accomplish.

Idaho is just getting started on its exchange while Washington state is much further along.

The exchanges will serve individuals required to purchase medical insurance because they aren't covered by their employer.

The exchanges are expected to allow purchasers to do many things, chief among them to compare more easily the costs and benefits of policy options.

In Idaho today, for instance, a 30-year-old single female looking for health insurance finds 61 variations in 16 plans from five companies, Blue Cross of Idaho (52 percent of the policies in the state) and Regence BlueShield (22 percent), plus PacificSource Health Plans, SelectHealth and CoventryOne.

Of these, only 46 provide maternity coverage, just 40 provide prescription coverage, 19 work with Health Savings Accounts, nine provide dental coverage and none provide vision coverage. Her doctor might not accept the one she likes. Monthly premiums range from $74 to $328; annual maximum out-of-pocket costs from $0 to $22,500.

Federal law sets rules for minimum coverage, maximum out of pocket expenses and range in cost between the cheapest and most expensive policies.

Interestingly, none of the nation's four largest insurers, Aetna, Humana, UnitedHealth Group or WellPoint, appear to be involved here yet.

Had the state decided to leave the exchange up to the federal government, they certainly would be. Whether a state-run exchange would allow in these national behemoths to drive down prices - and whether that would be the effect - remains to be seen.

The complex health insurance environment won't necessarily be made simpler by the health insurance exchanges.

But Idaho and Washington should both be working to make sure it doesn't make the situation more complex for individuals and families that, almost by definition, will be under stress when they have to use the exchange to find health insurance.

Originally posted at

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