In complying with the Patient Protection and Affordable Care Act (PPACA) states could end up creating 4 rather different health insurance exchange programs.
Consultants at Deloitte, New York -- discussed that possibility in San Francisco, at a meeting organized by America’s Health Insurance Plans (AHIP). The consultants shared their thoughts on four distinct exchange models that are emerging as states begin implementing exchanges for the January, 2014 effective date.
Background
Some states, such as Florida, have been experimenting with small group or individual health insurance exchanges for years, and Utah and Massachusetts have been using exchanges to try to help individuals get easier access to coverage.
Exchange provisions in the Patient Protection and Affordable Care Act of 2010 (PPACA) call for all states to have exchanges, in one form or another, by 2014.
Individuals and small groups up to 100 employees are supposed to be able to use the exchanges to buy subsidized coverage effective January 1, 2014. States must provide a status update to the federal government by January 1, 2014 letting it know if their individual exchange developments are on track for the Januray 2014 effective date.
Numerous Exchange Development Means Available to States
A state can set up one exchange for its residents or several exchanges based on region. States can also opt to join a multi-state exchange consortium thuis providing a lare purchasing pool and perhaps driving down costs. In addition, a state also can let the federal government provide exchange services for its residents, although it seems few will choose this option.
Federal officials say an exchange could take many forms as this is one of the PPACA provisions that provides a great deal of state autonomy in complying with the federal legislation.
The Deloitte consultants suggested that 4 distinct operating models will emerge.
- * Information aggregators, which serve mainly to help individuals and small groups get information about coverage.
- * Retail-oriented exchanges, which want to maximize sales.
- * Market curator exchanges, which try to offer consumers and employers the best plans.
- * Guided exchanges, or exchanges that will impose strict standards on the available plans without providing the same kinds of tools that the market curator exchanges will provide.
The Deloitte consultants suggested that managers of the retail-oriented exchanges and the market curator exchanges may face challenges when it comes to meeting customer service goals, because they will share responsibility for dealing with the customers and the health carriers.
State Examples
WisconsinAn example of a state utilizing the retail-oriented exchange apporach may be Wisconsin. On its exchange website the state notes that its exchange developmenmt is based on a "free-market" approach. Specioically Wisconsin says its approach will attempt to accomplish the following:
- * Encourage transparency in all efforts of the Office so that Wisconsin residents and employers may make appropriate health care decisions; and
- * Assess the impact of the Patient Protection and Affordable Care Act (PPACA) on Wisconsin insurance markets and programs; and
- * Seek counsel from a wide range of health care stakeholders including but not limited to consumers, small businesses, providers, insurers, labor unions, and other vested organizations; and
- * Conditionally develop a plan for the design and implementation of a Wisconsin health benefit exchange that utilizes a free-market, consumer driver approach; and
- * Explore all opportunities and alternative approaches that would free Wisconsin from establishing a health benefit exchange, including federal waivers.
California appears to be taking a more "information aggregator approach",in contrast to the state of Wisconsin as it seeks to enhance competition and provide quality plan alternatives. California's exchange development website touts its attempt to "enhance competition and provide the same advantages available to large employer groups by organizing the private insurance market, including a more stable risk pool, greater purchasing power, more competition among insurers and detailed information regarding about the price, quality and service of health coverage."
New YorkThe state of New York has begun its planning for health insurance exchange development and states its purpose is to "establish a single Exchange in New York – a centralized, customer-service oriented marketplace where individuals and small groups will be able to purchase qualified health plans, receive eligibility and subsidy determinations, and be enrolled in a range of coverage options, including public health coverage programs." This approach seems to fall into the "market curator" category with an emphasis on creating quality plan options described by the Deloitte consultants.
Rhode IslandOn its health care exchange development website, Rhode Island offers this overview of its planning priorties which are perhaps the most prescriptive compared to the other states efforts described above. The Rhode Island apprach seems to be the most "guided" of the four described here as its HIE process details some very comprehensive guidelines and requirments of health insurance plan participation.
Summary
As these health insurance exchange development processes take shape and move toward implementation more unique state nuances and program goals will be identified. Stay tuned as I will concentrate on those differences and highlight opportunities where states can use HIE development to make significant progress in both expanding health insurance coverage and improving health care quality and, hopefully, maximizing health care purchasing dollars. Stay tunes, this is going to be an interesting journey.
