State officials developing health insurance purchasing exchanges have voiced growing appreciation for the roles that can be played by benefit advisers.
Those trends, plus recent guidance from the Health and Human Services Department, were examined last week at a program in Washington, D.C., sponsored by the Bipartisan Policy Center and Kaiser Family Foundation. Experts said that now and over the next 18 months states will be learning much more about what is expected of them, models the states might take — and partnerships necessary to make them successful.
“There are some very important overlaps of interest between states and brokers,” acknowledges Josh Sharfstein, the Maryland Secretary of Health and Mental Hygiene. “States want to see more people covered, and brokers understand the importance of cost.”
To aid communication, Maryland has brokers sitting on its Small Business Exchange and explaining their capabilities. “Brokers are very much part of the discussion in Maryland,” says Sharfstein.
Kansas, meanwhile, has created an Agents, Brokers and Navigators group to include advisers in their plans. “We have agreement there is a role, but we haven’t begun talking about things like the compensation arrangements,” reports Linda Sheppard, director, PPACA Project Manager, Kansas Insurance Department.” Agents and brokers will be playing a key role in our exchange.”
Seed money sprinkled around by the federal government out to be enough to fund many such discussions. To date it has distributed $326 million to states seeking to establish the health insurance exchanges outlined by the Patient Protection and Affordable Care Act. However, only 14 states have passed enabling legislation. Many expect a flurry of activity in the next session of state legislatures, beginning in January 2012, while others will proceed via Executive Order.
Efforts will depend somewhat on the fragile economic recovery affecting state revenues. Ray Scheppach, a University of Virginia professor and chair of the BPC Health Project Insurance Market Reforms Initiative, says there are also likely to be ongoing tensions between state and federal governments about exchange implementation rules. However, he reports substantial state support for exchanges, which he believes will live up to their roles as “laboratories of democracy.”
Others believe exchanges can help educate consumers on health plan choices and costs, leading them toward the purchase of coverage that makes the most sense for them individually. That’s also important for employers, who will begin making “play or pay” benefit sponsorship decisions over the next few years.
The goal of exchanges is to create a more organized and competitive insurance market. Exchanges would offer a choice of health plans, establish common rules for offering and pricing insurance, and help consumers understand their options. States electing to be involved are required to demonstrate a viable exchange program on Jan.1, 2013, and be operational with an exchange on Jan. 1, 2014. The exchanges will be open to employers with up to 100 employees in 2014. In 2017 states can allow employers with more than 100 employees to purchase coverage for workers through an exchange, at which point pay-or-play decisions will have even more variables.
Thus far it appears that exchanges will fall into one of four categories:
1) Information aggregator: Delivers bare-bones capabilities to meet legislative requirements. Enrollment transactions are passed on to health plans’ websites.
2) Retail-orientation: Creates a retail shopping experience with robust service capabilities. Offers a broad range of products varying by price, design and consumer assistance capabilities.
3) Guided exchange: Limits carriers through competitive selection process. Products may be standardized. Potential interim model for states short on funding.
4) Market curator: Robust end-to-end consumer experience from shopping to enrolling. Limits carriers through competitive selection process. Extensive customer service.
Through the latest HHS guidance, federal officials have demonstrated flexibility and willingness to “meet states where they are” in 2013, according to Steve Larsen, director of the Center for Medicare and Medicaid Services’ Center for Consumer Information and Oversight.
As these developments unfold, many officials remain optimistic about the prospects for implementation.
Among them, former Ohio Governor Ted Strickland, state co-chair of the BPC Health Project, thinks “the creation of exchanges is an opportunity to foster public-private partnerships that result in better health for all Americans.”
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