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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Today’s Policy Agenda: Will Private Exchanges Be the Health Care of the Future?



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 Obamacare provides doctor visits, eventually.

You may have to wait longer to see a physician in 2014, according to a report by health-care consulting firm Merritt Hawkins. Since 2009, wait times to see a general practitioner increased in two-thirds of the cities surveyed. While wait times to see a general practitioner only increased by a few days in some cities, others saw dramatic increases: Atlanta, Philadelphia, and Seattle all saw wait times increase by ten days or more.

Wait times are likely to keep increasing: Obamacare is adding millions of new patients to the already busy system via state Medicaid expansions and the health-care exchanges. Experts have long worried that the U.S. doesn’t have the doctors or facilities to meet new demand. The Association of American Medical College estimates that there will be a shortage of 45,000 general practitioners by 2020 (it has pushed for more government funding for medical education as a solution).

Long wait times will likely disproportionally affect low income patients because some physicians do not accept Medicaid or accept Medicaid patients at lower rates.

New York sees some of the worst rate shock of 2014.

New Yorkers may see premiums increase greatly in 2015: On average, insurers requested a rate increase of 13 percent relative to last year’s rates, according to the New York State Department of Financial Services. After many premiums in the state were reduced by the implementation of the law last year (New York had many costly regulations before Obamacare but no individual mandate), this large increase for 2015 premiums comes as an unwelcome shock.

Some New York state officials see no cause for concern, noting the availability of subsidies and the likelihood that proposed rate increases will be reduced. However, as Avik Roy explains here, new Yorkers likely still pay more than other Americans for insurance because New York already had a very unique — and very expensive — healthcare system before implementing Obamacare.

Official rates will be set in late August, around the time when other states will be finalizing their rates, too — a process sure to be of political interest for both parties in midterm season.

Will private exchanges offer the health care of the future? 

When one entrepreneur found that the options offered by District of Columbia’s federal run exchange were too expensive both for some employers and employees in the restaurant industry, she started her own exchange. Industree Exchange, started for an industry group by former private chef and meeting planner Alisia Kleinmann, features 15 full-coverage plans along with several lower-cost options that are especially attractive for young, typically healthy individuals – a common demographic in the restaurant industry.

“Every single option has been designed, negotiated and built specifically for the demographics of the restaurant industry,” Kleinmann said. “They keep you in compliance with Obamacare and they’re completely affordable.”

Private exchanges may reduce administrative burdens, lower costs for employers and employees, and offer more options tailored specifically to employees. In fact, some experts estimate that enrollment on private exchanges could be greater than enrollment on public exchanges by 2018. Private exchanges can complement public exchanges, as vehicles for individuals who have insurance through the public exchanges to purchase additional benefits through their employer, as Eric Grossman, a health-care consultant, explained to Paul Howard of Forbes in January. As the health-care market continues to change, mixing private and public options and exchanges may be one way people end up meeting their health-care needs.



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