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.

The GAO recently released the new report title Medicaid Expansion: States’ Implementation of the Patient Protections and Affordable Care Act. The report contains results of research conducted to see what states are doing to implement Medicaid expansion, learn what their responsibilities are, and identify what challenges they face. It addresses the following issues relating to implementing Medicaid expansion:

  • State responsibilities
  • Actions taken to prepare
  • States’ views on the financial implications of expansion

The GAO conducted a web-based survey and interviewed Medicaid officials in six states: Colorado, Georgia, Iowa, Minnesota, New York, and Virginia. They selected these states based on:

  • Size of expected enrollment
  • Enrollment rates
  • Geographic dispersion
  • Insurance coverage provided to childless adults

The ACA requires Medicaid eligibility to be expanded to non-elderly people with incomes at or below 133% or the federal poverty level (FPL). It also specifies that each state must change how it determines Medicaid eligibility, as well as streamline eligibility and enrollment systems that will coordinate enrollment across Medicaid, Children’s Health Insurance Program (CHIP) and the state health insurance exchanges.

The bill allows states to opt out of the expansion, but stipulates that they will lose their existing federal Medicaid funds if they do so. When the Supreme Court ruled on the constitutionality of the health care law in June of 2012, it modified the provision on Medicaid expansion by allowing states to opt out without losing their existing federal Medicaid funding. This change prompted the Congressional Budget Office (CBO) to update its budget estimates, reflecting projections that fewer people will be covered by Medicaid and CHIP, while more people will be enrolled through state health insurance exchanges and uninsured than in its previous estimate. The GAO completed its field work on this study prior to the Supreme Court’s ruling, so the impact of that decision was not included in their analysis. However, the requirements for states that choose to participate in the Medicaid expansion have not changed as a result of the Supreme Court decision and the report is still a useful snapshot of how these states are getting on with preparations for it.

Requirements for states that participate in Medicaid expansion

By January 1, 2014 states must:

  • Expand eligibility to non-elderly people with incomes at or below 133% of FPL
  • Streamline their enrollment process
  • Transition to Modified Adjusted Gross Income (MAGI) to determine income eligibility
  • Identify those who are newly eligible to obtain federal matching funds
  • Simplify and streamline the eligibility determination process

Table 1: ACA provisions included in the GAO study.

ACA Provision

Description

Medicaid eligibility Expand eligibility to non-elderly people with incomes at or below 133% of FPL.
Modified adjusted gross income (MAGI) Transition to using MAGI to determine income eligibility.
Early expansion option States can expand coverage to newly eligible people prior to January 1, 2014.
Maintenance of effort States must maintain eligibility standards until an exchange is fully operational.
Federal matching Federal matching funds will be provided to states for newly eligible adults.
Streamlined eligibility and enrollment systems “States must provide a process for individuals to apply for or renew their Medicaid eligibility through a website that enrolls individuals in the appropriate program (Medicaid, CHIP, or exchanges) no matter to which program they originally apply.”

The GAO found that the states studied are taking steps to prepare for Medicaid expansion, but they face some challenges including the need for additional federal regulations and guidance. CMS has issued a final Medicaid rule and indicated that more guidance will be forthcoming. In addition, the majority of state budget directors interviewed believe the following factors will contribute to the cost of expanding Medicaid.

  1. Administration required to manage Medicaid enrollment
  2. Acquisition or modification of information technology systems to support Medicaid
  3. Enrolling people who were previously eligible, but have not so far enrolled in Medicaid

They also expressed uncertainty about:

  • The impact of shifting exiting Medicaid enrollees into health benefit exchanges
  • Fiscal capacity and the state’s share of Medicaid expenditures
  • Guidance needed to develop budget estimates
  • Additional regulations and/or guidance needed on
    • How to apply MAGI
    • Conversion of Medicaid eligibility standards
    • Access to eligibility data through the Federal Data Services Hub

After reviewing and commenting on the study, HHS agreed to provide states with additional regulations and/or guidance on MAGI conversion and FMAP computation. HHS also reiterated that the decision to participate in Medicaid expansion is up to the state – there is no deadline date for their decision – and federal matching funds are available to help states cover information technology costs for modernizing eligibility systems, which don’t have to be paid back if the state decides not to expand Medicaid.

Read the GAO report

Previous blog post: CBO update estimates $84 billion savings from SCOTUS decision

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

TANSTAAFL

March 29, 2011

Full Moon view from earth In Belgium (Hamois).

Image via Wikipedia

Some of us are old enough to remember when Robert Heinlein popularized the saying “There ain’t no such thing as a free lunch” in his novel The Moon is a Harsh Mistress. A new report out today from the Kaiser Family Foundation proves the old adage still holds true. According to the report, if the Medicare age were raised to 67 as many deficit-reducing proposals suggest, the federal government would save $7.6 billion. Good news, right?  Unfortunately, such a change would cause costs to  individuals for out-of-pocket expenses, employers for retiree health care benefits, and state governments for Medicaid, to increase by about $10 billion.

The fact is, in spite of massive fraud and sometimes inefficient care delivery,  Medicare is the most cost-effective way to deliver medical care to seniors. Medicare’s Medical Loss Ratio (MLR) is about 3% – that is, 97% of the money spent on Medicare goes to cover medical expenses, not administrative functions. Compare that to private insurers, whose MLR varies but is seldom under 15%.

So here’s the question: does the federal deficit reduction that might result from raising the Medicare age bring benefits that are worth the costs it will charge to individuals, employers, and state governments? Doesn’t seem like such a great trade-off to us – but we’d like to hear your take on it.

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