The Democratic health care plan’s creation of a "health insurance exchange" brings up some concerns for private health insurance providers — and for Republicans who are opposed to an expansion of government.

The exchange will create a marketplace, likely online, which will allow for businesses and individuals to select their health insurance on their own. This will differ from most current practices in which either health insurance brokers, or in-house employees work as facilitators to match businesses and individuals with health insurance plans, although it also duplicates existing private enterprise solutions.

The possibility of individuals and businesses utilizing an online system to purchase their health insurance raises a few questions for providers, including Blue Cross Blue Shield of Kansas.

Mary Beth Chambers, manager of corporate communications for BCBS of Kansas, said that currently BCBS offers several options for those seeking coverage, including an online tool which can help a person pick out their coverage.

However, prior to securing the plan, a BCBS employee personally speaks with the individual or business to make certain the plan is the appropriate choice. Allowing individuals to choose their own plan without professional guidance raises some concerns, Chambers said.

“I think that it is a risk anytime that you make purchasing decisions without talking to an expert,” Chambers told Kansas Liberty. “I think that it will require folks that purchase through an online exchange to be very knowledgeable in what they are purchasing and to be able to understand the information as it is presented. Hopefully it would be presented in very plain language.”

Some private online health insurance sites already offer online comparisons of various plans from multiple insurance providers. It wasn't immediately clear how their services would differ from the proposed government service.  Their services are offered without cost to insurance shoppers.

eHealthInsurance.com, for example, is staffed with information facilitators who help match customers with companies. NetQuote.com offers health insurance from various providers, along with other insurance products.

The shifting to an online marketplace would lessen the demand for facilitators and has caused some to speculate that the exchange could result in a loss of job for health insurance brokers and employees.

But Chambers said she believed that many Kansans would still want to personally discuss their health insurance coverage plans with a facilitator before committing to a certain plan, rather than only utilizing an online exchange tool.

“I fully believe that some Kansans will still want to work with someone one-on-one,” Chambers said.

In an October speech on health care reform, Speaker of the House Nancy Pelosi referred to the exchange as a mechanism which would “give Americans a better deal in the individual insurance market.”

Proponents of the exchange say it would create competition and choice, but opponents say it will work to expand the government’s reach into the health care system.

Rep. Arlen Siegfreid, R-Olathe, and Speaker Pro Tem is a strong opponent of a government-run health insurance exchange.

“I am concerned about anything run by the government,” Siegfried told Kansas Liberty. “This will increase the cost and size of the government and eventually increase the cost of insurance.”

Siegfreid, like many Republicans, said he saw the exchange as a tool that will work to increase the size of the public insurance option, while either putting private insurance companies out of business, or creating private insurance companies, which would be so heavily influenced by government intervention that they would basically end up as an extension of government.

“How can private insurance companies compete with the government,” Siegfreid asked. “They simply cannot. And what we do not need is an insurance version of Fanny Mae and Freddie Mac.”

- Holly Smith

The Week in Review