Why have exchanges? … What’s an exchange? What isn’t?: A Two-Part Blog Series on Health Care Insurance Exchanges

By Brian Bohlig, chief marketing officer
Extend Health – A Towers Watson company

We’ve seen dramatic paradigm shifts for our employer clients and their retirees that come out of combining the power of health reimbursement arrangements and the individual Medicare market through an exchange. Here are some basics tenets that we have found to be differentiators in the value exchanges can offer:

  • An exchange is not just a website. There’s a lot more to it. On the back-end, an exchange should seamlessly parse compliant enrollment data to carriers and the state exchanges accurately and laser fast. An exchange should offer robust customer service to help your employees identify the best plans for them.
  • An exchange is not just a call center. A lot of the technological advantages of the online environment, like electronically filing enrollments within 24 hours, are lost to your group if your exchange is still working largely by fax or mail.
  • Real-time reporting is crucial to making the transition from a group plan to an exchange. If an exchange can’t give you real-time reporting during enrollment, you’re driving blind. Worse yet, your only reporting channel could be hearing from your own group that things aren’t going well.
  • A one-carrier exchange is like the sound of one hand clapping. A carrier website that offers only its own plans denies consumers competitive value, denies consumers options if that carrier raises rates and denies consumers a consumer advocacy partner.

At Extend Health, we built our exchange on the pillars of a web interface, back-end support systems and benefit advisors. Unlike many other online shopping experiences, buying health care coverage is one of the most complex and costly ventures people have to deal with in their lives and the quality of what’s picked relative to your health needs is critical. So it’s really important to consider more than just the lowest cost premium.

Despite having invested many millions in our technology platform, we’ve found that there’s no substitute for a knowledgeable helping hand when choosing the best health plan. Extend Health employs hundreds of knowledgeable, licensed professionals who spend time on the phone with our consumers to make sure they’ve considered the important elements of their medical needs, prescription drug needs and lifestyle needs when choosing a plan. Our technical systems set the high bar in the private Medicare exchange marketplace, but our benefit advisors are our secret sauce. They bridge the gap between the technology side and the real-life decision points that go into picking the best health coverage for each individual.

Health insurance exchange checklist

Based on this deep well of experience and development, here’s what you should look for when evaluating a health insurance exchange.

Multiple health insurance carriers

• Provides true choice, price comparison and competition

Intuitive user
interface

• Empowers people with robust benefit and price information
• Collects key info on medical, prescription and lifestyle needs
• Matches key info to the best set of health plans available by ZIP code

Robust back-
end systems

• Submits a complete, compliant enrollment application online and fast
• Seamlessly transmits data to and from state exchanges

Strong customer
support

• Provides a helping hand matching key info to the best plans
• Advocates for consumers with carriers on the exchange

Nimble reporting capabilities

• Allows insight into the application process
• Gives insight into communications uptake, plan choices and exchange performance

Caveat emptor: If the exchange you’re looking at is missing one or more of these, there are some more serious questions you should be asking.

Keep this list of questions and answers handy when you’re evaluating an exchange partner. See full list: Questions To Ask An Exchange

  • Has an employer ever pulled out of your exchange during open enrollment?
  • What percent of enrollment applications are you still submitting on paper, either by fax or mail?
  • Do you offer real-time reporting on call wait times or during the enrollment application process?

At Extend Health, we have set and raised the bar on end-to-end exchange technology, from our user interface to our back-end and call management systems to our real-time, interactive reporting interface. The first goal of our exchange model and technology infrastructure has always been to make the user experience as smooth as possible – for consumers to choose health plans and for employers who want to increase options their employees’ options while managing health benefit costs.

There’s a world of uncertainty out there and you don’t want your employees or retirees to be the beta testers of a fledgling exchange. Arm yourself with these questions and know what you’re walking into.

For regular commentary on developments and trends in health care, insurance, and technology, follow @brycewatch and @ExtendHealth on Twitter and check out https://www.extendhealth.com.

Related articles

Read part one in this two part series: Exchanges Part 1: Everyone wants in

Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare insurance exchange.

Benefit ViewThe newly available Extend Health BenefitView™ dashboard lets employers ensure no retiree is left behind during the enrollment process. BenefitView gives employers access to something they’ve never had before on a Medicare exchange: real-time, interactive reporting on the experience of their retirees as they transition from the employer’s group coverage to their own individual Medicare plans on an exchange.

In “Retiree Medicare exchange previews improved transparency,” Employee Benefit News sheds light on how valuable this degree of insight is to HR professionals leading their companies and employees through a health care benefit transition this significant.

BenefitView is the culmination of eight years of our insight into delivering a premium health insurance exchange experience for consumers and employers on the Extend Health private Medicare exchange.

BenefitView answers burning HR questions

BenefitView offers employers immediate answers to questions around goals and milestones when transitioning from a group plan to the individual Medicare market:

  • Have retirees responded to our communications?
  • Are their calls to benefit advisors getting through in good time?
  • Are they making and completing their appointments with benefit advisors?
  • How long are those calls taking on average?
  • Are they choosing plans and which ones?
  • Are there groups that we may need to do additional outreach to?

BenefitView gives employers up-to-the-minute, unfiltered answers to these questions with the click of the mouse.

BenefitView users and creators tell us what they think

We talked to representatives from a few of the employers who have used BenefitView for mid-year transitions. Here’s what they had to say.

“Before our transition started, we wanted to make sure our retirees first understood that they were going to get more choice and control over their Medicare health benefits. Then we wanted to provide retirees with all the right information they needed to participate,” said Melissa (Missy) Hartfiel, benefits planner, Global Compensation and Benefits for International Paper. “With BenefitView, we can instantly see all the data on our progress – the number of retirees contacted, the number of calls and enrollments completed, how quickly our retirees were being answered, and the length of those calls. This inspired a lot of confidence in the Extend Health solution. As a non-techy, I also appreciated that BenefitView is visual and easy to use – there was no learning curve and I got all the data I wanted with one click.”

“The data HR professionals see in BenefitView is the same data that Extend Health sees in-house,” said David Lash, senior director of product management for Extend Health. “This actually makes our weekly progress meetings with employers much more strategic. We don’t have to spend time communicating numbers or determining where we are in the process. We’ve been looking at the same numbers all along and we are able to focus our energy on optimizing the course for each phase of the transition. It’s much more efficient for everyone. More than the technology involved, our goal for this tool was to create this premium experience for employers.”

“Employers sponsor and subsidize these transitions of their retirees to individual plans to assure that every retiree gets a chance to have the supplemental Medicare coverage they want while managing company costs and future liabilities,” said Brian Bohlig, chief marketing officer for Extend Health. “It’s very important to employers, to us and most importantly to retirees that these transitions go as smoothly as possible.  Extend Health has always provided employers frequent and comprehensive progress reporting to ensure smooth transitions – but now we’ve made it real time and on demand. BenefitView makes communication between Extend Health and employers seamless, and protects employers from finding out after the fact that their retirees missed out on getting the health care coverage they needed or wanted.”

Another Extend Health client, Oak Ridge National Laboratories, also experienced the difference BenefitView could make in the process of selecting individual Medicare plans. “With BenefitView, I was able to give our HR Director up-to-the minute progress reports whenever she asked for them,” said benefits manager Scott McIntyre. “As we neared the end of our enrollment period, we were checking BenefitView daily and adjusting our communications and outreach to make sure we were giving all of our retirees every chance to participate. BenefitView allowed us to keep our finger on the pulse of what was happening with our retiree transition whenever we wanted.”

BenefitView specifications

Real-time information available to employers through BenefitView includes:

  • Number of retirees enrolled versus the total number eligible in time remaining
  • Percent of eligible retirees contacted
  • Number of appointments scheduled
  • Number of appointments met
  • Plan types selected across different populations
  • Average premiums across different populations
  • Number of unique plans selected
  • Number of unique carriers selected
  • Total number of calls
  • Average wait times for before reaching a benefit advisor
  • Average time to handle calls

Get a BenefitView demo

Contact Extend Health online or by phone 1.888.232.1653 for a demonstration of BenefitView. Check out BenefitView online yourself.

Visit Extend Health to use the ExtendExchange™ platform – the nation’s largest private Medicare insurance exchange.

McKinsey fires back

June 20, 2011

If you’ve been following the controversy around the recent McKinsey & Company Quarterly, you’ll want to read this. McKinsey, in a break from its traditional policy, has released survey questions and results from its recent study of employer-sponsored insurance.

McKinsey has been pushed to this unusual step by a groundswell of Democratic unrest about the survey’s methodology. McKinsey’s response explains that “The survey was not intended as a predictive economic analysis of the impact of the Affordable Care Act. Rather, it captured the attitudes of employers and provided an understanding of the factors that could influence decision making related to employee health benefits.”

Visit Extend Health — the nation’s largest private Medicare exchange.

McKinsey & Company in Shanghai _3417

Image by !/_PeacePlusOne via Flickr

According to a recent study released by McKinsey & Company report titled How US Health Care Reform Will Affect Employee Benefits, 30 percent of employers will “definitely or probably” drop health insurance for their employees. This is a far cry from earlier projections, such as the Congressional Budget Office’s estimate that only 7 percent of employees will have to switch from employer-sponsored insurance (ESI) to subsidized-exchange policies in 2014.

McKinsey’s survey of 1,300 employers found that the impact will be much greater than those original estimates. Here’s a summary of their key findings:

  • 30 percent of employers will “definitely or probably” stop offering ESI
  • 45 to 50 percent of employers will “definitely or probably” seek ESI alternatives
  • 50 to 60 percent of employers with “high awareness of reform” will pursue ESI alternatives
  • 30 percent of employers would still benefit economically by dropping coverage even after compensating employees with other benefits or increased salaries
  • 85 percent of employees would not quit their jobs if ESI was no longer offered

McKinsey’s findings also indicate that to remain competitive for top talent, employers that drop ESI are expected to make up for it by increasing other benefits like salaries, vacation, retirement, or health-management programs. However, McKinsey believes that employers won’t have to compensate employees for 100 percent of the lost insurance value.

Interestingly, the survey shows that employers that are considering dropping ESI are doing so because they realize ESI may not be the most efficient way to provide health coverage for their employees after 2014. But the report also points out that most employers will probably find solutions somewhere between the extremes of completely dropping ESI and continuing their current offerings:

“For employers and insurers, success after 2014 will require a better understanding of employee and employer segments, and the development of the right capabilities and partnerships to manage the transition.”

Not everyone agrees with the findings of this thought-provoking report. The Obama administration, for instance, has pointed out the McKinsey’s research is at odds with that from the Congressional Budget Office, Rand Corp., and the Urban institute. One thing is for sure: the McKinsey report is a must read if you are interested in the potential effects of health care reform on employer-sponsored health care benefits. You can download the report from McKinsey Quarterly.

Visit Extend Health — the nation’s largest private Medicare exchange.

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With so much going on in Health care these days, it can be hard to keep up. Below you’ll find some articles that we thought were very interesting and thought provoking. We thought you might enjoy reading and commenting on them.

How Health Insurers Can Avoid Being Blockbuster in a Netflix World

As millions of Americans wait poised to begin shopping for health insurance via public and private exchanges, will consumers finally take their place in the driver’s seat when it comes to selecting and purchasing healthcare?

The Ryan Plan

Paul Ryan’s proposal to make Medicare a voucher system isn’t necessarily a bad idea, but such a system has to be calibrated right if it isn’t going to shift too much of the cost of health care onto the shoulders of seniors. That’s why the analysis by the Bipartisan Policy Center is a must-read to understand how the Ryan proposal would work out over the coming years.

Can Berwick Be Saved? Here’s One Possible Scenario

Berwick has announced a number of key initiatives recently. Can CMS utilize its tools to promote value effectively without his leadership?

The Partnership for Patients: The Inside Scoop on a Game Changing Safety Initiative

Secretary of Health and Human Services Kathleen Sebelius and Medicare chief Don Berwick announced the Partnership for Patients  initiative, “which aims to decrease preventable harm in U.S. hospitals by 40 percent and preventable readmissions by 20 percent by 2013.”

Launching Accountable Care Organizations — The Proposed Rule for the Medicare Shared Savings Program

As one of the first health care delivery-reform initiative under the Affordable Care Act, ACOs are just one of many initiatives under the ACA charged with achieving their three-part aim: better care, better health, and slower growth in costs. The CMS believes ACOs will be a very important tool to help Medicare beneficiaries get high quality care.

Visit Extend Health — the nation’s largest private Medicare exchange.

Benefits and human resources consulting firm The Segal Company has just published its yearly survey of health care plan cost trends. Based on responses from 60 insurance carriers, the report offers a wealth of helpful data on the outlook for plan costs in 2011 and compares 2009 actual results to forecasts. The 6-page report is chock full of data on medical plans for active employees, pre-65 retirees, and Medicare-eligible retirees, prescription drug carve-outs, and dental and vision plans.

The report projects cost trends for Medicare Advantage PFFS and PPO plans with prescription drug coverage to increase in 2011 by 7%, vs. an expected 9.5% for 2010. MA HMO plans with RX are projected to grow by 7.4%, vs. a projected 8.2% in 2010. Interestingly, forecasts in the past have erred on the high side, as “…actual trend rates in 2009 for MA HMOs…were significantly lower than forecasted…” and “Actual prescription drug trend rates continue to be lower than forecasted.”

One of the contributors to the always worthy and interesting The Health Care Blog, Mike Turpin, has some very interesting and challenging advice for HR benefits managers as they consider how to respond to the changes wrought by the Affordable Care Act. For example, here’s a short excerpt:

Don’t be intimidated by self-insurance – Many employers underestimate the advantages of self-insurance and overestimate its complexity and risk.  But, in a post reform world, firms with more than 200 employees should give serious consideration to partial or total self-funding.  Aside from the total transparency of commissions, fees, administrative expenses and pooling charges, employers own their own data. The sooner employers get comfortable with self-insurance as a risk financing strategy, the sooner HR professionals can construct loss control programs that can mitigate claims costs.”

Mr. Turpin is currently the Executive Vice President for Benefits for the New York based broker, USI insurance Services and was formerly northeast regional CEO for United Healthcare and Oxford Health.  Great food for thought, and recommended reading.

The Census Bureau has just released a report titled Income, Poverty, and Health Insurance Coverage in the United States: 2009 and the trend in insurance coverage shows that health care reform is more needed than ever.  While median household income didn’t change between 2008 and 2009, both the number of households considered poor, and the number of uninsured individuals, showed significant increases. One very interesting statistic: the number of people covered by Medicare in 2009 was not statistically different than the number covered by Medicare in 2008. Read the rest of this entry »

We are pleased to report that Extend Health recently debuted on the 2010 Inc 500 list of fastest growing private companies in the United States. Over the past 3 calendar years, Extend Health grew annual revenue in excess of 2,500% and is the 94th fastest growing company on the 2010 list. In addition, of the companies listed in the top 100 of the 2010 Inc 500, Extend Health is in the top 15 in terms of total annual revenue at $36 million+ in annual revenue. Here is a just a sampling of what our company has achieved:

  • Extend Health pioneered the health plan exchange concept before it became a term of art and a significant part the Health Care Reform Act which will be implemented over the next 4-10 years.
  • Extend Health has saved its clients over $1 billion in wasted health care spending over the past 3 years.
  • Extend Health is changing the way that employers deliver health care in the United States, and their retirees can choose from a range of plans instead of the one-size-fits-all group plan.
  • The public sector is waking up to the fact that they are unnecessarily overspending on retiree health care coverage. Public employer interest in an exchange model will continue to grow in an environment where financial pressures on public sector budgets will only increase.
  • Extend Health’s technology and carrier/client integrations are the industry-leading standard.

Stay tuned to this space in the months to come – we are incredibly excited about what’s coming next for Extend Health.

Extend Health, our client Volkswagen, and Ford retiree spouse Barry Wood are all part of this very interesting piece just out on Information Week. The story investigates how our web-based and call center technology, much of it developed in-house, work together with our highly-trained benefit advisors to help retirees navigate the “maze of Medicare.” Mr. Wood says that Extend Health’s services “took the fear out of making the wrong choice.” Thanks Mr. Wood – that’s exactly what we aim for: confidence that the plan you enroll in is your best possible choice.

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