To Check Obamacare's Success, Look Beyond Sign-Ups : Shots - Health News To know if taxpayers got good value in setting up the health care exchanges we need to see what happens in the next few years, economists say. Will buyers and sellers keep coming?
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How Health Insurance Exchanges Are Like Flea Markets

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How Health Insurance Exchanges Are Like Flea Markets

How Health Insurance Exchanges Are Like Flea Markets

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It's MORNING EDITION from NPR News. I'm Steve Inskeep.


And I'm David Greene, good morning. It is far from a final report card, it's probably more like grades at the end of the first semester. But with a full enrollment period over, we're beginning to get an idea for how those health care exchanges are performing. These were set up under the new Affordable Care Act. The federal government actually gave out billions of dollars in grants to help states set them up. Some states have been more successful than others. Eric Whitney reports on how to measure that success.

ERIC WHITNEY, BYLINE: If you want to visualize what these exchanges, these marketplaces are - what the nearly $4 billion in federal grants to states paid for, think flea market. At this one in Colorado Springs, Dillon Keller is looking to move some roller skates.

DILLON KELLER: My mother-in-law works for a roller rink and these were the ones that people left behind for over a year.

WHITNEY: Keller is spending 20 bucks for the little square of asphalt here to sell his roller skates. Why not just have a garage sale?

KELLER: It's not as successful. For every one person at a garage sale, you probably have at least 50 out here.

WHITNEY: The flea market does a lot to draw customers in. It has a big billboard next to its highway exit, a food court and even hires a live band on weekends. Buyers and sellers flock here because it's an easy place for them to find each other and make deals. The state exchanges and are supposed to be like that for health insurance, like flea markets, or for that matter, like the New York Stock Exchange, says economist Douglas Holtz-Eakin.

DOUGLAS HOLTZ-EAKIN: You could look at health insurance and see the same thing. Do people want to sell their policies on there? Or is it growing in magnitude? How many options do I have? Are they growing? Decreasing? Those are standard metrics of success for marketplaces.

WHITNEY: Those metrics aren't really in yet for the new health coverage marketplaces, they've only been open since October 1. We do know how many people those states signed up in the first six months, but Holtz-Eakin says that's not enough to conclude which state's exchanges are successful.

HOLTZ-EAKIN: We know the outliers. We know the big failures in Oregon and Maryland, for example. We know what appear to be the great successes in places like Kentucky, which are quite cheap and have a big fraction of people signed up. In between, it's pretty hard to make the case. We know who's better than someone else.

WHITNEY: It's tempting to divide the federal grant funds by the number of people each state signed up, that would give you a cost per customer. You could then compare states based on that. Jonathan Gruber, an economist at MIT says you could do that but don't.

JONATHAN GRUBER: It's really just not a meaningful calculation.

WHITNEY: Insurance exchanges are long-term investments, they should last for decades, Gruber says. And every state that set up its own had a lot of similar upfront costs, like hiring tech companies to build their online shopping sites.

GRUBER: A lot of the programming - the computer setup - is the same regardless of how many people enroll. So by that number, California's going to look better than Rhode Island. It's sort of like inferring we should never let small states do anything.

WHITNEY: It's also nearly impossible to compare states with those that did their own exchanges based on the financial information the White House is now releasing. And some states got millions or tens of millions in outside help from private donors - even celebrity endorsements.


SCARLETT JOHANSSON: Hi, this is Scarlett Johansson. Did you know you may be able to enroll in new, more affordable health insurance plans?

WHITNEY: But there's just not enough information right now for economists like Holtz-Eakin to pass judgment on the Affordable Care Act's marketplaces. He says they're only part of the picture of whether the federal health law is a success anyway.

HOLTZ-EAKIN: The focus on the exchanges per se is a natural fallout from melting down at the beginning, but it's not really the right metric for success or failure.

WHITNEY: Economist Jonathan Gruber agrees.

GRUBER: Success can really only be defined ultimately as, you know, a significant improvement in the well-being of the U.S. public - uninsurance rates drop, seeing health improve, seeing bankruptcies drop.

WHITNEY: The public won't know whether that's what they got for the tax money they spent on exchanges until well after this November's elections. Next year, though, federal grant funding for state exchanges starts running out. That means they have to start growing on their own soon. Most have still enrolled only a minority of people in their states who are eligible to use them. For NPR News, I'm Eric Whitney.

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