Health Insurance Exchange schemes in Colorado - What are they?

Health Insurance in Colorado - the problem of Choice

Those searching for health insurance in Colorado face two critical problems. The first is the almost complete lack of competition. For example as of now, Colorado's largest health insurer occupies 35% of the market place. Such a market leads to either a monopoly or an oligopoly where informal agreements between companies ensure that the customer doesn't benefit from any real competition.

The second problem is that health insurance plans are designed to be uncomparable. The various fees, commission and hidden clauses make it nigh impossible to place heath insurance plans side by side for comparison. Even those plans that have the same focus and are designed to target the same audience cannot be readily assessed next to each other.

The end result of the above two factors is that Coloradoans end up paying more for insurance that delivers less. They're stuck with a "Take it or leave it" attitude.

Medical Insurance across state lines

One of the ramifications of Obama's health care reforms relates to the ability of consumers to have the same choice all over the US. Meaning that a customer in Colorado should be exposed to the same array of health insurance plans that someone in say Michigan is. This will allow more choices and a larger number of competitors. However, the problems of comparability still remain. In addition, some claim that offering insurance across state lines will mean that existing companies will get bigger and monopolize the smaller players leading to even less choice than there is now.

How a Health Insurance Exchange works

One particular proposal has cut through the debate and has support from almost every interested party - except maybe for the corporates themselves. The idea is to create an online marketplace where customers can easily compare health insurance plans side by side from across the country - perhaps with an option to choose a government health plan as well. Such a plan will ensure a baseline from which customers can compare the offerings from private companies thereby leading to possibly cheaper plans.

There are of course several issues surrounding health insurance exchanges including legal ones. Health insurance being a state subject, such offerings across the nation will take away some of the state's power. But it's possible and it seems to be one ray of hope that everyone agrees on and one that can happen without being too expensive either.

Summary

A health insurance exchange in Colorado will be good news for customers as it will give them a new way to shop, and hopefully reduce costs and increase efficiency.