“A Conversation About Healthcare Insurance Exchanges”

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“A Conversation About Healthcare Insurance Exchanges”

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What is the purpose of the exchanges?

• Exchanges are intended to make buying health insurance easier and more affordable, they are essentially virtual stores for selling health insurance

• Their goal is to help individuals and small businesses:

– Compare health plans

– Get answers to questions

– Find out if they are eligible for tax credits for private insurance or health programs like Children’s Health Insurance Programs(CHIPs)

– Enroll in/purchase health insurance

What will each exchange provide?

• A website and 1-800 hotline to ask questions and purchase insurance

• Standardized plan descriptions for easy comparison by consumers and small businesses

• Websites will feature a calculator to determine costs

• Plans will be pre-ranked according to price, coverage and other variables

Who is eligible to use the exchanges?

• The Accountable Care Act (ACA) requires:

– Employers with more than 50 full-time workers to offer health insurance for

employees and their families

– Each exchange to offer plans for consumer and small businesses (up to 100 employees)

– The plans offered to feature a minimum set of benefits or pay a tax of $2,000 per employee for failing to do so (the tax will not apply to the first 30 workers)

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What types of plans will exchanges offer?

• Commercial plans will be available through:

– Insurers

– Licensed insurance agents

– Insurance brokers

• Government plans will also be featured:

– Medicaid

– CHIPs (Children’s Health Insurance Program)

– Other

How are plans chosen for exchanges?

• Plan coverages and other features are reviewed by federal and state governments for the exchanges:

– These are referred to as “Qualified Health Plans” or “QHPs”

– Plans will be accepted, assessed and renewed upon review approval on an ongoing basis

What will commercial plans provide?

• Ambulatory patient care

• Emergency medical services

• Hospitalization

• Maternity / newborn care

• Mental health, behavioral health and substance abuse care

• Prescription medications

• Rehabilitative services, devices, patient care

• Laboratory testing services

• Preventative, wellness and chronic disease services

• Pediatric care that also features oral and vision care

What will state government plans provide?

• Medicaid and CHIPs plans differ from state to state

• Some states have more than one type of Medicaid and/or CHIPs plans to better serve different needs

• Coverage will vary between states and the plans they offer

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How will exchange users choose a plan?

• They may choose by cost based on several variables including age, employment status and income

• Some persons may qualify for a plan from a commercial provider (Aetna, BlueCross BlueShield, Human, United Healthcare, etc.)

• Other will be directed to Medicaid or other government-sponsored plans

Can applicants be refused coverage?

• Yes, applicants may be denied, eligibility/coverage is not automatic

• A formal appeal process will be available for exchange customers

– More detailed guidelines are being developed for acceptance, denial and appeal decisions

Who will operate the exchanges?

• Some exchanges will be run by individual states

• States may partner with the Federal government to jointly setup and operate an exchange

• A state may opt out of the program and the Federal government will operate one on their behalf

• Exchanges operated by the Federal government are expected to be operated by the states at a later date

• After the election, U.S. Secretary of Health and Human Services, Kathleen Sebelius, extended a January, 2013 deadline to February 14 th, 2013 for states to choose which option to choose

When will the exchanges be open?

• Exchanges will become operational 10/1/2013

– Consumers and small businesses can begin reviewing and choosing plans

– Active coverage for beneficiaries will be effective 1/1/2014

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Is use of the exchanges mandatory?

• Individuals and small businesses can obtain health insurance from any source they prefer

• The exchanges are intended to provide easily accessible, comparative healthcare insurance information to evaluate / purchase health insurance

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Why is Information Technology important?

• Exchange customer information will be cross-referenced with data on file in state Medicaid and Children’s Health Insurance Program (CHIP) plans to

• Consumer income will be verified through state-based data sources

• Application information will be matched with plans offered in the exchange to determine which ones best align to the exchange customer’s needs

Who is paying for the exchanges?

• Federal funding is covering much of the startup expenses

• By November, 2012, over $2 billion has been allocated to support state activities to develop websites, enrollment/eligibility management systems, etc.

• By 2014 the exchanges must be self-supporting through fees collected from insurers using the exchanges to market their plans

• For plans sold through federal exchanges, insurers will pay HHS 3.5% of the premium to support exchange costs

What are some concerns?

• Will exchanges be used by enough customers to remain viable over time?

• Can exchanges be adequately funded over the long term?

• If insurers withdraw from offering plans on an exchange, will remaining ones offer competitive rates?

• As small businesses grow beyond 100 employees, how can they economically migrate to a non-exchange plan?

• How can coverage/cost issues be minimized when beneficiaries move to other states?

• Can federal and state government adequately oversee the exchanges, plan providers and service levels for consumers/small businesses?

Summary

• Health insurance exchanges are a key component of healthcare reform

• Significant cost, management and technology challenges remain ahead for federal and state governments in launching /maintaining the exchanges

• Internal and external web-based technology will play a pivotal role in the functionality of all exchanges

• Affordability and coverage issues are a concern for potential consumer and small business customers

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