A couple of days ago, we reported on Aetna's apparent change of heart regarding the sale of individual medical insurance here in Ohio. Today, they're back in the news:

There are three essential differences between the Public (FFE) and Private Exchange models:

First, only plans purchased on the Public Exchange will be eligible for subsidies (maybe: the subsidy rules keep changing);

Second, plans available on the Public Exchange are expected to have much smaller ("skinnier," in the vernacular) provider networks;

And third, fewer carriers are expected to participate in the Public Exchanges (limiting competition and choice).

It's that third item that's key: absent a robust marketplace, even subsidized plans are likely to remain out of the financial reach of many folks. That's due partly to premiums, and partly to plan design. The least expensive ObamaTax-compliant plans ("Bronze" level) have potential out-of-pocket maximums much higher than many plans available today, further exacerbating the (un)affordability issue.

If (when?) major players like Aetna take a pass on the Public version in favor of the Private, it will cause an even greater strain on the former's sustainability. The Private Exchange model, on the other hand, looks poised to be reasonably successful: for the most part, these will offer more choice (and thus competition) and better service.

Wait, what's that about service, Henry?

Well, it's like this: agents (you know, the folks who are trained and experienced in the actual business of health insurance) are effectively shut out of the Public Exchanges. But a lot of us have signed up for the Private Exchanges. So when a consumer needs an accurate, knowledgeable and credible answer, to where do you think he will turn?

On the other hand, we know that a lot of agents have already thrown in the towel (and/or are planning to do so in the near future), so that may not be a realistic assessment, either.

Yeah, I'm just full of warm fuzzies today.