Download Health Insurance Exchanges: Goals and Strategies SCI Annual

Health Insurance Exchanges:
Goals and Strategies
SCI Annual Meeting for State Officials
August 4, 2010
Enrique Martinez-Vidal
Vice President, AcademyHealth
Director, State Coverage Initiatives
Overview of Presentation
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Minimum Requirements under PPACA
Why Do It?
Defining Goals
Structuring Exchanges
Impact of Current Markets
Procurement Issues
Minimum Requirements under PPACA Structural
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Primary purpose is to array coverage options for
consumers (individuals & employers)
– Traditionally has been a lack of information/high search costs
– Creates better balance for the purchasing side of the transaction
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Operated by state agency or state-established, non-profit
entity
Choice of state-wide, subsidiary exchanges across state,
or multi-state
Requires an exchange in the individual and small group
markets
– Exchanges may be combined
– Markets may be combined
Minimum Requirements under PPACA Administrative
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Certify, recertify, and decertify qualified health
plans based on HHS criteria
Toll-free hotline
Web site with standardized comparative
information
Rate qualified health plans per federal
standards
Present plan options in standard format (four
plan benefit options in standardized manner –
bronze; silver; gold; platinum; catastrophic for
young adults/exemptions)
Minimum Requirements under PPACA Administrative
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Determine and inform individuals of eligibility
for public programs (Medicaid/CHIP/Other
State programs) and enroll members
Provide economic calculator for consumers
Determine whether individuals are exempt
from individual mandate
Communicate with Treasury Department
(eligibles and exempts)
Inform employers regarding changes in
coverage of employees
Minimum Requirements under PPACA Consumer Assistance
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Operate a Navigator program
– Provide culturally/linguistically appropriate
public education
– Facilitate enrollment in qualified health plans
– Refer consumers with complaints/questions to
appropriate agencies
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Brokers/agents
– States may let brokers/agents sell coverage
offered in exchange
Minimum Requirements under PPACA Accountability
Consultation and stakeholder participation
 Accountability to federal government
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– Annual report to HHS Secretary on activities,
receipts, and expenditures
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Transparency
– Publish average costs of licensing, regulatory
fees, administrative costs, monies lost to
waste, fraud, abuse, etc.
Potential Value of State-Based
Insurance Exchange
 Maintain
regulatory authority over large share of
market
 Prevent
risk selection issues caused by varying
rating/underwriting rules inside/outside the
exchange
 State
is better positioned to coordinate benefits
and eligibility across state programs
 Powerful
state tool to help advance other health
care priorities
Potential Risks of State-Based
Insurance Exchange
 Challenges
 Must
of creating new institutions
be self-sustaining by 2015
 Tension
between demands to keep fees low and
demands for high quality customer service
What Are Your State’s Policy Goals?
 Make health insurance and care more like consumerdriven markets?
 Increase health insurers’ accountability?
 To drive system affordability and cost containment?
 To transform the way carriers do business and contract
with providers?
 To build an easy-to-use shopping tool for consumers?
 To help ease the transition for safety-net providers from
reliance on disproportionate share payments and other
uncompensated care funding to commercial insurance
reimbursement?
 To moderate premium increases?
How to Structure Exchange:
Market Organizer
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Utah Health Exchange
– Impartial source of information on health plans
– Provides structure to market to enable
consumers to compare health plans and
purchase coverage
How to Structure Exchange:
Selective Contracting Agent
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Massachusetts Connector
– Market organizer + attempts to influence market
and enhance competition
• Contracts with limited number of carriers; offers limited
number of plans
– Provides structure to market to enable consumers
to compare health plans and purchase coverage
– Does not necessarily negotiate premiums with
carriers but can “encourage” carriers to “sharpen
their pencils”
How to Structure Exchange:
Active Purchaser
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Plays a more active role in the market
– Establishing plan designs
– Purchasing coverage like a large employer procures
health benefits for employees
– Reminiscent of purchasing coops of ’90s
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May be necessary to get the best prices where
competition is limited
Can push insurers to invest in quality
improvements and delivery system changes
Can aim to elicit more consumer information to
be used to negotiate and remove problematic
plans and protect consumers from unexpected
barriers
How Local Conditions May
Affect Policy Decisions – Part I
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How many carriers are in the state? How competitive
are the carriers for the non-group and small group
market populations?
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Should non-group/small group markets be merged?
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How competitive are the provider systems? Is physician
access currently adequate?
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Are there regional variations regarding carriers and
providers that require special consideration?
How Local Conditions May
Affect Policy Decisions – Part II
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What is the nature of insurance market reforms
inside/outside the exchange? Should exchange rules be
extended outside the exchange?
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How will adverse selection be addressed for the
exchange? Impact on reinsurance/risk adjustment
requirements?
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Should the exchange be the sole distribution channel for
a market segment such as non-group? (impact on
undocumented)
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What are the mandated benefits in the state?
Procurement and Contracting Dynamics
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Importance of strategic planning
Need to sequence and coordinate inter-related tasks
Effort required to procure the services of and manage
relationships with large vendors, including issuers of
qualified health plans
Essential activities:
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Eligibility and Subsidy Determination
IT/Website Infrastructure
Outreach, Marketing, and Advertising
Qualified Health Plan Procurement
Call Center Development
Enrollment and Premium Billing