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Navigating the ACA Exchange Environment: A Payer Perspective

Navigating the ACA Exchange Environment: A Payer Perspective



Payers across America are embarking on a new mission — seizing the opportunities presented by healthcare reform. In few places is this effort more evident than with the requirements for rollout of ...

Payers across America are embarking on a new mission — seizing the opportunities presented by healthcare reform. In few places is this effort more evident than with the requirements for rollout of health insurance exchanges (HIX) state by state. The impact will be felt not only by states, but by commercial health insurance payers that will need to collaborate with each state in order to effectively roll out HIXs nationwide.

Health plans, in conjunction with states, have the responsibility to develop and implement insurance exchanges for the population. By creating a new, streamlined marketplace where individuals, families and small business owners can easily shop for and purchase health insurance, HIXs are supposed to help curb the rising tide of the uninsured while promoting competition and blunting rising costs. While the mission is clear for both states and payers, the challenges are many — including legal, political, and market uncertainty.



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    Navigating the ACA Exchange Environment: A Payer Perspective Navigating the ACA Exchange Environment: A Payer Perspective Presentation Transcript

    • Navigating the ACAExchange Environment:A Payer PerspectiveFebruary 28, 2011
    • • Introduction — Why Dell? Agenda • Health Insurance Exchanges (HIXs/Exchanges) in operation and in the Affordable Care Act (ACA) • Working with Exchanges and “Lessons Learned” • What’s Happening Now - And What To Do About It • Moving Forward2 Services
    • Introduction – Why Dell?3 Services
    • Questions WorthConsidering….Is there value in state-basedExchanges outside of ACA?What should payers considerwhen looking at Exchangeparticipation and/or support?How can payers and stateswork together to build anExchange that meets a widerange of goals andrequirements? Services
    • Exchanges in Operation and in the ACA5 Services
    • We Are Facing The Greatest Changes ToHealthcare In More Than A Generation -And Exchanges Are At The Heart New records in New member New channelHealth number of demographics partners covered livesInsuranceExchangeNew market New product New rules for New budget hitmechanism designs managing for states members6 Services
    • In light of all the uncertainty, questions worthConsidering: What should payers How can payers andIs there value in states work together to consider whenstate-based build an Exchange that looking at ExchangeExchanges outside of meets a wide range of participation and/or goals andACA? support? requirements?7 Confidential Services
    • Goal of the Exchange Create a sustainable insurance marketplace for individuals, employers and employees • Launch a multi-channel (paper/phone/web) marketplace, with all necessary front Create and back-end infrastructure • Develop an approach that is attractive to all stakeholders and is easy to use, Sustain meets federal and state requirements and generates sufficient revenue • Certify plans as meeting Exchange coverage and access requirements Insurance • Support (and even drive) competition among plans and provide a choice toMarketplace consumers (individual and small group members) and employers • Use competition to drive up choice and quality of plans and providers whileIndividuals driving down priceEmployers/ • Use competition to drive up choice and quality of plans and providers while driving down priceEmployees • Make it easy for employers to contribute to and support their employees’ health 8 Services
    • States will Use Flexibility from CMS to Tailor the Exchange that Best Meets Their Needs Light Pragmatic Robust • Lighter regulatory role • More developed policy • Highly developed policy • More “free market” by infrastructure and regulatory model promoting economic • Thinking beyond • Tradition of leadership andEnvironment growth traditional (e.g., regional oversight • Satisfied with level of exchange) • Use to promote policy State competition and quality goals • May receive waiver to • Some market • Active purchaser of create a simpler vision management insurance • Primarily aggregates • Commercial, off-the-shelf • Standardized products information and low-risk solutions • Robust functionality • Limited services to plans • Remains flexible due to • Substantial support forCharacteristics and members political shifts education and outreach Exchange California Utah? Maryland? Massachusetts 9 Services
    • To be Successful, Exchanges Must Engage aVariety of Stakeholders Role of the Plan:Health Insurance StateExchange Gov’t • Create products that meet the requirements of the ExchangeFederal Health Plans • Market their products (and byGov’t definition, the Exchange)Local Exchange • Enroll members via the ExchangeStakeholders Vendor(s) • Service member needsBrokers Members • Report, as required, to the Exchange and regulatorsProviders Employers10 Services
    • Every Exchange will Go Through Some Version of Four Primary Phases Exchange Development Maturity Model Phase 1: Plan & Phase 2: Design Phase 3: Test, Phase 4: Operate Engage & Build Certify & Launch & Sustain (2010-2011) (2011-2013) (2012 – 2014) (2013 – 2014+) • Pass legislation • Select vendors • Obtain federal • Market Exchange • Assess capabilities • Design readiness • Serve membersCritical Activities and market architecture • Certify plans and for Exchange • Monitor/regulate • Create road map • Create standards products performance to 2014 • Develop risk • Engage consumers adjustment • Provide input • Provide input to • Make participation • Enroll and serve • Assess impact to design and decisions membersCritical Activities membership architecture • Begin marketing • Receive and for Plans • Assess market/ • Create internal • Prepare for reconcile payment characteristics of process/system operations newly insured change roadmap 11 Services
    • Biggest ChallengesChurnMovement of members betweeneligibility categories/subsidy levelsCustomer ServiceContinuity between call centersOutreachEducating newly insured on how to useinsuranceRisk Adjustment &Product DesignSustainable approved products 12 Services
    • Working with Exchanges and “Lessons Learned”13 Services
    • Payers Should Explore Opportunities andChallenges from the Operational to theStrategic People Process • Understanding each other’s worlds • Administrative simplification • Managing stakeholders • Plan certification • New members that may be • Member enrollment significantly different from current customers Technology Strategy • New integration partners (e.g., federal • Rethink channel & distribution government) strategy • New integration points • Product portfolio • New shopping portals • Re-balance risk portfolio • Re-define business modelThis is a significant opportunity to collaborate and join with states eager to test newstrategies and reduce risk — take control now, or take the chance of losing it for good14 Services
    • Lessons Learned Working EffectivelyOverly Complex Siloed Customer Misunderstanding Unwillingness to Undervaluing thePlan Design Service Models the Newly Insured Change Relationship• Plans tend to have • There will be • Likely to be • Don’t expect the • Understand what lots of iterations – multiple largely healthy, Exchange to build the Exchange need to work from challenges but not know around you governance defined benefits under the new how to use • Need to meet model is trying to while at the same model: they insurance them halfway, achieve time trying to need to be • Education and and sometimes • Understand the innovate solved together outreach, in further challenges • Leverage both partnership, will Exchange call centers and be critical leadership/staff web portals face 15 Services
    • What’s happening now—and what to do about it16 Services
    • What to Expect Over the Next 6 Months Unpredictable State-specific Continued implementation agendas and hybrid uncertainty progress at federal solutions are and state level emerging Heightened levels Helping small of engagements businesses and job and scrutiny growth17 Services
    • Planning for the “What If…”The PPACA goes down sometime between now and 2014? Ways the law could be What still exists if the law Ways an Exchange can significantly “impeded” is impeded still help• Defunded by GOP • Rising healthcare costs States: Congress • Significant uninsured/ – Provide easy way to apply• Partially repealed – key underinsured subsidies provisions declared population – Encourage innovation by carriers unconstitutional • Stagnant quality – Provides a counterweight• Fully repealed – entire • Badly fragmented to consolidating hospital law declared subsidized care/ groups/ACOs unconstitutional insurance Plans: • Powerful hospital/ACO – Capture potentially very groups going direct to attractive risk pool employers – Attract employers with defined contribution health plans – Grow share to increase leverage with providers – Manage churn with appropriate “gap” products18 Confidential Services
    • What Plans Should Be Doing Now Engage Educate Prepare Evaluate19 Services
    • How We Can Help20 Services
    • Dell ServicesBringing Innovation to a Changing Health Payer Market • Administrative application andWe support more outsourcing servicesthan 100 insurers - • More than 40 million membersand the only supportedoperating • Business process services • Implement open source technologyExchange in the solutions to increase efficienciesindustry - with • Aid disease managementstandard and • Help commercial and BCBS customers transition to a consumer-centric modelcustom solutions. • Facilitate web-based transactions among all constituents to strengthen relationships21 Services
    • Next Steps • Contact the Dell Services Payer Team with questions: LuAnn_Gohn@Dell.com – Industry thought leadership: › Conference speakers (www.dell.com/speakers-bureau) › Future webinars – Insight – Strategy – Execution • Attend the AHIP Exchange Conferences – March 9-10, 2011 – June 15, 2011 – Nov. 16-17, 201122 Services
    • Key Takeaways This is potentially the biggest change in healthcare since 1965 There are both opportunities and risks for health plans in this change The impacts of change will be felt across the health plan Key implementation decisions will have to be made before political uncertainty is resolved Plans can participate in this change or have it thrust upon them23 Services
    • Thank You