Good News For Health Insurance Consumers in the District of Columbia

The D.C. Council has taken a big step forward in implementing health reform.  The legislation that it unanimously approved last week will greatly enhance competition, transparency, and the affordability of health insurance for individuals and small businesses in the District.

The legislation — the Better Prices, Better Quality, Better Choices for Health Coverage Emergency Amendment Act of 2013 — sets forth key standards for health plans that insurers want to sell in the D.C. Exchange (i.e., or health insurance marketplace), providing significant consumer protections and value to District residents.  In addition, the bill transitions the current individual and small group insurance markets into a single unified market that the D.C. Exchange will oversee.

A diverse coalition of consumer groups, patient advocates, health care providers, small businesses and others, including the Center and our partner organization, the D.C. Fiscal Policy Institute, supported the D.C. bill.

The District joins Vermont as the only two jurisdictions with state-run unified health insurance marketplaces.  That’s especially important for smaller states where fragmentation in the markets can lead to less transparency, higher premiums, and greater difficulty for regulatory oversight and enforcing consumer protections.  A unified market will benefit D.C. consumers because it:

• ensures meaningful standards that apply to all health plans in the individual and small group market, including robust definitions for coverage of mental health treatment, services for autism, and prescription drugs;
• increases transparency, since all health plans in the market will be displayed in an easy-to-use online portal, through which consumers can make apples-to-apples comparisons of plans as they shop;
• fosters greater competition among insurers, as each insurer must display all of their plans and premiums side-by-side with their competitors and compete based on price and quality; and
• limits the risk of adverse selection by preventing insurers operating outside the exchange from “cherry picking” the healthy, which could threaten the long-term viability of the exchange.

D.C. Council approved the bill on an emergency basis to expedite its provisions, but the Council must consider a permanent version in the coming months.  The final bill must include these critical consumer standards if the District wishes to meet its commitment to provide access to affordable health care for all D.C. residents.