Today, the Department of Health and Human Services is hosting what can only be described as a health wonk’s dream — a day long conference on the the new health insurance exchanges. These new markets won’t be operational until 2014, but as this panel on small employers demonstrates, establishing effective exchanges that attract enrollees and insurance companies, won’t be easy.
Below is just a glimpse at all of some of the suggestions and policy recommendations for how to implement the small business exchanges:
- WEBSITE IS NOT ENOUGH: “The previous panel said, ‘we’re just going to provide a website for everyone to go to.’ That’s impossible. We will not be able to communicate. The way we have structured our program is that we are very much technically invested…but we distribute our product through brokers because what we have found is that there needs to be a touching point to these small employers. They don’t have that HR department. They’re looking for somebody to help them. Because it’s something they don’t understand and they want to run their business. [Phil Vogel, Senior Vice President, Connecticut Business and Industry Association Service Corp]
- EMPLOYERS WILL NEED TO WRITE ONE CHECK: “The employer [will need to] send one check out to the exchange….They’re going to have employees with multiple plans, employees can buy up and there is going to be all kinds of costs and deductions for employers…they need to be able to write one check. [Terry Gardiner, National Policy Director, Small Business Majority.]
- REAL COST CONTROL STILL IN DELIVERY REFORMS: “We talked about the expense structure of the exchange, the administrative expenses or pulling people together. Those are getting at the small dollar amounts of the premiums paid today. What we really need to make sure is that we look at the cost of care….Just pooling people together is not going to reduce costs.” [Phil Vogel, Senior Vice President, Connecticut Business and Industry Association Service Corp]
- RULES SAME OUTSIDE/INSIDE EXCHANGE: “If you’ve got products offered outside that are a lot cheaper than products offered inside the exchange, those products are likely to be more attractive to healthier enrollees, businesses with healthier enrollees and you’re going to winde up with higher prices inside the exchange than outside the exchange.” [Michael Johnson, Director, Public Policy, Blue Shield of California]
Watch a compilation:
Indeed, insurance brockers have been actively lobbying for a larger role in the reformed market place, arguing they can help the newly insured find affordable coverage in ways that the automated website cannot. Vogel’s experience with running a small business exchange in Connecticut, suggests that their services may be need.
During the health care debate, Jon Kingsdale had argued that businesses would not participate in the exchanges if they had to send separate checks to different insurance issuers. But since the CBO said it would have to score any efforts by the exchange to process the checks as an addition to the government’s ledger, the law currently foresees employers sending separate checks. This is something that could potentially be changed in the regulatory process.
Finally, establishing regulations that prohibit insurers from luring healthier enrolles out of the exchanges and implementing successful delivery reforms will be critical to lowering health care spending. For the latest thinking on the former, check out Sarah Lueck paper here.