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

• 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

• 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.

Coventry Health Care just recognized Extend Health for efficiency and customer satisfaction, including zero customer complaints in 2011. Here’s a brief snip from the press release.

“Extend Health Inc., a leading provider of health benefits management services, including the nation’s largest private Medicare exchange, received two first place awards from Bethesda, Maryland-based Coventry Health Care, Inc. (NYSE:CVH) for exceptional customer service performance by a partner in 2011.

  • Zero customer complaints reported to the Centers for Medicare and Medicaid Services (CMS) by seniors signing up for Coventry private Medicare supplement plans through Extend Health;
  • The lowest 90-day plan cancellation rate — called rapid disenrollment — which, at just 0.5 percent, was far less than the typical rate.”

Click here to read the complete news release.

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

CMS released the 2013 preliminary Medicare Advantage payment and policy guidelines last week. They will finalize this on April 2nd. The guidelines published in April may vary slightly from the information presented here, but it should be very close.

The preliminary estimate of the Medicare Advantage rate increase for 2013 is 2.47%, which is a weighted average across all counties. Consistent with the election year politics, this will be the highest rate increase proposed in 4 years. This will help ensure retirees maintain a choice of plans without significant increases in premiums or decrease in benefits. If macro health trends remain low as it did last year, we could see another year of low single digit premium trends for MAPD plans.

Here is an excellent summary of the advance notice put together by the Gorman Health Group.

Addtional resources:

CMS Press Release

Reuters article

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

On Wednesday (10/12), the federal government released its annual review of private Medicare Advantage health plans. In addition, 5-Star quality ratings are now posted along with the plans loaded in “Medicare Plan Finder available on Medicare.gov.

This year health plans are paying much closer attention to their ratings because they stand to make more money if they score higher on Medicare’s 5-star quality rating system. The bonuses could be substantial, even for insurers that only make small increases in their ratings. Carriers with well-rated plans hope that the droves of baby boomers becoming eligible for Medicare will pay attention to the star ratings and choose their plans.

The ratings are based on 36 measures in five categories, covering things like screenings, tests, complaints, service, and other relevant measures. There’s a helpful CMS document called, “Choose Higher Quality for Better Health Care,” that provides a very good overview of the program. We also recommend reading our previous blog post, “New MA star ratings released by CMS.”

For more, check out these very good articles written recently on the subject.
Private Medicare Plans Use Stars To Navigate For Profits” from NPR

Chasing The Stars, Insurers Improve Quality — And Revenue” from Kaiser Health News

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

Will 2011 be known as the year big insurers gobbled up Medicare Advantage companies? According to a recent article in HealthLeaders Media, by Margaret Tocknell, it just might. Tacknell speculates that the MA HMO acquisitions by HealthSpring, WellPoint and Humana are just the beginning as MA growth continues to climb, driven by companies transitioning retirees from employee-sponsored plans to MA plans, and increasing numbers of baby boomers reaching retirement age. To point out just how fast Medicare Advantage is growing, the article sites data from the Kaiser Family Foundation indicating enrollment in MA plans has more than doubled in recent years, growing from 5.3 million in 2005 to 11.1 million in 2010. Trocknell writes:

. . . competition is heating up as well-financed players such as Aetna, Humana, WellPoint and UnitedHealth look to increase their share of the market. James [Sarah James, health insurance analyst with Wedbush Securities] expects to see more acquisitions of smaller Medicare Advantage companies as healthcare reform kicks in and economies of scale become even more important. “The Medicare Advantage market is very fragmented and it’s getting more difficult to be a small player.”

Read the full article: “Insurers Eye Medicare Advantage Acquistions.”

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

Provisions in the health care law call for reductions to the 14% supplemental payments to Medicare Advantage plans that start in 2012, reducing payments by $145 billion over 10 years. This reduction was widely called “cuts to Medicare” by those opposed to reform – and subsequently caused many seniors to worry about reduced services, increased out-of-pocket costs, and being driven out of Medicare Advantage plans back to original Medicare. Recent moves by the HHS to provide incentives for improved quality to a broader range of plans may alleviate some of these worries.

In an effort to provide incentives for Medicare Advantage carriers to improve quality, the law was originally going to provide bonuses for plans that received four to five star quality ratings on the government’s grading system. This would have left something like 80% of Medicare Advantage enrollees in plans that were not eligible for bonuses, and, presumably, more susceptible to cuts in services and or cost increases.

HHS has just announced that it will also give bonuses to plans that receive three or three-and-a-half stars, but at a lower percentage. This change means that four out of five enrollees will now be in plans that are eligible to receive bonuses. This $6.7 billion infusion of funds should postpone any drastic reductions in service and higher costs.  The AP published a helpful and informative piece explaining the change, which you can read here.

Titled The Public’s Health Care Agenda for the 112th Congress and fielded just before the repeal vote, the latest Kaiser Family Foundation/Harvard School of Public Health poll results are out today.  Unfavorable views on PPACA, which had been dropping in recent months, took a sharp turn upward to 50% (from a low of 40% in November) while favorable views dropped to 41% – with sharp divisions in opinion along party lines.

Paradoxically, many provisions of the reform bill are viewed favorably by a majority of respondents, including reducing payments to Medicare Advantage plans (56% favorable vs. 35% unfavorable), the 50% discount on drugs in the Part D doughnut hole (85% favorable vs. 14% unfavorable) and increasing Medicare premiums for some higher-income seniors (53% favorable vs. 45% unfavorable). Majorities favor provisions that will expand coverage, but are opposed to individual and employer mandates.

Recommended reading, especially the Chartpak.

Extend Health gets a nice mention in an article by Glenn Ruffenach in today’s Wall Street Journal Smart Money magazine. Mr. Ruffenach provides plenty of sound advice on how to navigate the Medicare maze for those of you who are just becoming eligible. To help explain just how difficult it can be without some professional help, he talked to Michigan retiree Barry Wood. Mr. Wood tried to create a chart on his own to compare his options and says, “It was the most confusing thing I’ve seen in my entire life.”

What Ruffenach doesn’t say is that Mr. Wood then turned to Extend Health for help finding the right plan. In a conversation with Extend Health, he told us that, “You have to realize when you turn 65 that your health benefits are going to change. I think people have to take better care of themselves and what they’re doing, and be prepared for the changes that are going to occur in their lives. You can’t just sit there and let the time come and go ‘oh my gosh’ what am I going to do, I didn’t know this was going to happen.’ I think people have to be proactive and they have to understand what is going to happen in their lives. Working with Extend Health was excellent because without the advice and counsel of the advisor, I would not have made the proper decision about my healthcare.”

Good advice from both the Wall Street Journal and Barry Wood, a retiree who’s been there.

For information on this topic please read our new post, “Health plans “score” with Medicare’s 5-star rating system.”

The Centers for Medicare and Medicaid have released updated star ratings for Medicare Advantage plans, just in time for the Annual Enrollment Period. You can see the new ratings on the Medicare Plan Finder on Medicare.gov.

The ratings are significant for at least two reasons: most importantly, they’re an indicator of the quality of  the service provided by each plan and can serve as a guide for individuals as they evaluate their coverage options.

The Star ratings are also important to the plan’s insurance carrier – because these ratings will be used by CMS to determine if the plan qualifies for a quality bonus payment in  2012. These bonus payments,  part of the health care reform bill, provide an incentive for plans to improve their performance.  MA plans that earn the highest rating of 5 stars are eligible to receive the largest bonus, equal to 5 percent, but all MA plans that have a score of three stars and higher will qualify for a bonus payment in 2012. (Plans with a rating lower than 3 stars for the past three years not only won’t qualify for bonuses, they also have a “low performer” icon placed next to their name.)

Wondering how CMS determines the star ratings? Read on… Read the rest of this entry »

With new Medicare regulations taking effect in 2011, we’ve identified four changes to Medicare Part C, D and Medigap plans that retirees should know about because they could affect their healthcare coverage. They  are: 

  1. Some Medicare Advantage (Part C) Private Fee for Service (PFFS) plans are ending
  2. Medicare Part D plans are being consolidated
  3. Four Medigap plans will no longer be sold and two new ones will be offered (Parts M and N)
  4. While average premiums for Medicare Advantage (Part C) plans will decline slightly, some plans’ premiums will rise

Information about the changes and what retirees can do in response follow.

Read the rest of this entry »