Financial Report

At a high level, US states’ Health Insurance Exchange (HIX) implementation plans appear as an interesting and colorful patchwork. While some US states are hard-at-work drawing and designing HIX plans, many other states are awaiting Supreme Court’s ruling and hoping for health reform implementation to get stalled. Further more, instead of enforcing a ‘one-size-fits-all’ exchange model for states, the federal government has awarded considerable autonomy to states for designing individual exchanges and deciding which facilities to administer via their exchange.

The disparity in states’ HIX endeavors, coupled with the leeway extended to states in designing structurally different exchanges, has complicated matters for payers, especially for those that operate nationally, as national players would need to align their products as per states’ respective exchange requirements.

In light of health payers’ pivotal association with exchanges, it is surprising to note that very few insurers have been drawn into the insurance exchange implementation processes. Accenture, through a recent survey identified that out of the 30 US states surveyed, 18 states felt it was too early for them to engage payers in exchange design conceptualization – despite the looming exchange deadlines. Of the 30 surveyed states, 8 states were in active discussions with payers on health benefit designs, while only 3 surveyed states were seeking payers’ inputs on exchange sustainability designs.

However, some states have shown interest in soliciting public inputs. California Health Benefit Exchange administrators requested inputs from exchange stakeholders on deciding minimum Qualified Health Plans (QHPs) standards and formulating strategies and approaches to establish consumer protection standards.

Similarly in 2010, West Virginia’s Offices of Insurance Commissioner (OIC) devised a state-wide stakeholder engagement campaign to invite inputs on state health exchange operating models, sustainability etc. A summary of West Virginia public responses can be read here. Maryland too requested public recommendations from healthcare industry participants on the sustainability factor of health exchanges. Last year, in June 2011, the District of Columbia hoped to solicit responses on exchange design, governance structure from payers and other exchange stakeholders through a Stakeholder Engagement Plan.

It needs to be recalled that the federal grants for running state health insurance exchanges would only be available until December 31, 2014. From January 1, 2015, all the insurance exchanges will need to be self-sustaining. Many healthcare experts are of the opinion that commercial payers may prove to be the key advocates for the exchanges’ sustainability.

Whether or not states engage payers in the exchange design processes, payers need to actively formulate future market strategies to keep ahead of the market competition curve and be technically and operationally prepared for all future associations with various state health exchanges. To achieve this, payers need to set up a robust and flexible system that can easily map to different states exchange qualifications.

Insurers would need to have an ear to the ground to keep track of and capitalize on any new developments in various states’ insurance exchange implementation plans. It may also benefit payers to initiate a detailed dialogue with exchange administrators on efficient exchange and benefit designs, viable sustainability models etc. in order to be better prepared for exchange integration.

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