Insurance Exchange at a Crossroads

En español | A health insurance exchange is being touted as a marketplace where Illinois residents and small businesses could comparison-shop for affordable health care plans.

See also: The new health care law and affordable health insurance.

But for that to happen, the General Assembly, which convenes this month, must overcome the same significant obstacles that thwarted efforts last fall to pass legislation establishing such an exchange. Called for by the federal Affordable Care Act, a health insurance exchange would help provide coverage for 1.4 million currently uninsured residents by 2020, according to the state Department of Insurance.

The exchange would cut the number of the state's uninsured nearly in half, said Andrew Stolfi, the department's acting director. The exchange would offer individuals, families and small businesses federal subsidies and tax credits to help pay for private plans and would create a website for comparison shopping.

Jennifer Creasey, AARP Illinois associate state director of advocacy and outreach, said the exchange would be good for consumers who don't have insurance through their employers. It would offer them a place to compare the cost of various options, just as they can go to a travel website and decide whether to fly nonstop to a destination or take a longer flight and transfer for a cheaper price.

"This will provide a lot more transparency," Creasey said, noting that AARP will lobby for an exchange bill. "And it will hopefully promote competition between the insurance products so prices would stay down."

Brian Imus, state director of Illinois Public Interest Research Group (PIRG), a consumer watchdog, said: "We could see more competition, more choices and lower cost for health insurance premiums because of the health insurance exchange. … Of course, it's all about how the lawmakers design it."

Illinois — like more than half of the 50 states — is moving forward with an exchange through legislation or an executive order. Under the federal law, exchanges must be in place by January 2014. Democrats across the country hailed the federal act as a way to expand coverage and hold down costs, but Republicans criticized it as expensive and unworkable. Twenty-six states have challenged the law in federal courts, where rulings have been mixed. The U.S. Supreme Court has agreed to consider the law's constitutionality with oral arguments set to begin March 26.

Next: Consumer groups, insurance industry at odds. >>