Health Insurance Exchanges In Switzerland And The Netherlands Offer Five Key Lessons For The Operations Of US Exchanges
Author: Ewout van Ginneken, Katherine Swartz, Philip Van der Wees
Since the 1990s some European countries have had regulated health insurance exchanges or have incorporated elements of exchange markets into their health systems. Health reforms in Switzerland and the Netherlands in 1996 and 2006, respectively, created managed competition in the countries’ health insurance markets, which are somewhat analogous to the US state and federally operated health insurance exchanges scheduled to begin operations in 2013 under the Affordable Care Act. We review the Swiss and Dutch experience with exchanges and offer specific lessons for the US exchanges. First, risk-adjustment mechanisms—which provide premium adjustments intended to compensate health plans for enrolling people expected to have high medical costs—need to be sophisticated and continually updated. Second, it is important to determine why people eligible for coverage don’t enroll and to craft responses that will overcome enrollment barriers. Third, applying for subsidies must be simple. Fourth, insurers will need bargaining power similar to that of providers to create a level playing field for negotiating about prices and quality of services, and interim cost containment measures may be necessary. Fifth and finally, insurers and consumers alike will need meaningful information about providers’ costs and quality of care so they can become prudent purchasers of health services, since managed competition among health plans by itself will not substantially drive down health costs.