Bloomberg: AMA Sides With Health Plans on Design of Exchange Insurance Markets

Doctors Side With Health Plans on Design of Insurance Markets

November 15, 2011

(Bloomberg) — The nation’s largest lobby of doctors urged states not to limit the number of health plans that participate in insurance markets set to open in 2014, saying the approach would give consumers more choice.

Delegates of the American Medical Association meeting in New Orleans endorsed by voice vote a proposal backed by health insurers and groups representing U.S. employers. The alternative would see states select plans based on price and best value.

“It is critical for exchanges to serve as open marketplaces to maximize competition between health insurance issuers and patient choice of health plans,” the AMA’s Council on Medical Services wrote in a report. Having states negotiate prices and benefits on behalf of consumers “would likely restrict patient choice,” the report said.

Every state must set up an exchange under the 2010 health- care law where uninsured people and small businesses can buy coverage. The U.S. will open exchanges in states that don’t act by 2013. Massachusetts, which opened the first state exchange in 2006, negotiates with insurers wanting to sell plans, while Utah’s exchange, the second to be created, is open to all plans.

The doctors’ group also went on record opposing efforts by Republicans to repeal a provision of the 2010 health-care law preventing states from dropping people from Medicaid, the insurance program for the poor. Delegates rejected a proposal endorsing a cap on Medicaid spending and converting the program from an open-ended entitlement into block grants.

Bidding Unnecessary

Insurance groups say bidding requirements in exchanges are unnecessary because the health-care law requires yet-to-be- issued rules defining baseline benefits plans participating in the markets will have to cover.

“Insisting that states act as active purchasers completely ignores all the other provisions in the Affordable Care Act that ensure plans all meet certain quality criteria,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans in Washington.

Eleven states have passed laws establishing exchanges, according to the Commonwealth Fund, a health research and advocacy nonprofit in New York. They are California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, Washington, and West Virginia.

Four more states — Virginia, North Dakota, Wyoming and Mississippi — have passed laws that establish the intent to create an exchange or creating a study, the group said.

Other groups backing open marketplaces include the U.S. Chamber of Commerce, National Retail Federation, the National Small Business Association, the National Builders and Contractors Inc., the for-profit hospital association and the pharmaceutical industry lobbying group, PhRMA.

To contact the reporters on this story: Alex Wayne in Washington, DC on awayne3; Pat Wechsler in New York at pwechsler

To contact the editor responsible for this story: Reg Gale in New York at rgale5

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