Health Insurance and You!

Two years from now, states and the federal government will begin operating their health insurance exchanges, online marketplaces where customers can compare the plans, prices, and networks offered by insurers in the state and enroll in the coverage of their choice. Online exchanges aren’t completely new – in fact, GetInsured.com is one of several private exchanges – but they have gained traction recently as an important part of health reform.

Now, notes Elizabeth Stawicki of Minnesota Public Radio, there is a new trend among health insurance companies: ahead of the 2014 launch of the government-run exchanges, several insurers are starting their own exchanges. Unlike the public exchanges, these sites may offer plans from only one insurer, allowing some comparison-shopping but only between the plans offered by that insurer.

But why? According to Ron Rowe of Blue Cross Blue Shield Kansas City, quoted by Ms. Stawicki, the aim is to get customers used to the format of an online exchange and familiarize them with the coverage a given company offers before the public exchanges force insurers to compete directly. Because switching plans often requires finding new doctors and hospitals, which can be unpredictable and a hassle, insurers hope that customers will develop loyalty to their plan by the time 2014 rolls around, rather than shop around for something new.

Readers, what do you think of this approach? We often suggest that you evaluate your coverage every year to make sure it’s still the best value and package for you (here and here, for example), but having to switch providers is a very real barrier to that. When you read about the plans that are out there, what factors would make you consider a switch?

The Supreme Court case pitting 26 states against the health reform law has received a lot of attention in recent weeks. But in the meantime, many of the same states have been making progress in building online health insurance exchanges, a key component of the 2010 overhaul. In fact, the Department of Health and Human Services (HHS) announced on Wednesday that 28 states and the District of Columbia have moved toward creating the exchanges, in spite of the legal challenges to the law and political opposition to it in many states.

According to an article by David Morgan of Reuters, 14 states have established their authority to set up exchanges, whether by a new law or one that previously existed, and 14 have taken steps to show that exchanges are useful. The health reform law set a deadline of January 1, 2013 for states to either move toward a state-based exchange or agree to participate in a national one, with the option of later establishing a state-based system. The exchanges must be up and running by the beginning of 2014. But given the uncertainties and Supreme Court hearings scheduled for this spring, some states have decided to wait and see what happens.

However, all states have made some changes since the law was passed. For example, writes Meghan McCarthy of the National Journal, 44 states have strengthened their review of increases to health insurance premiums. In addition, most states have accepted federal grants to help them plan for the exchanges, says Louise Radnofsky of the Wall Street Journal’s Washington Wire blog. According to Julie Appleby of Kaiser Health News, those grants total more than $729 million in 49 states and D.C. (only Alaska has not sought funding). Some states, however, do not plan to use their grants and will return the money.

As you’ve probably noticed on this blog, 2011 has been a big year for health policy developments at the national, state, and local levels. In the health insurance world, we saw progress by the states in crafting online health insurance exchanges and steps toward implementation of last year’s health care overhaul. Journalist Ezra Klein, in his Washington Post blog Wonkblog, posted a good roundup yesterday of 2011’s health policy highlights, which we supplement below with milestones that we’ve blogged about.

Health Reform and Nationwide Changes. The Affordable Care Act included several provisions scheduled to take place between 2010 and 2014, many of which began this year.

• In January, Republicans in the U.S. House voted to repeal the health reform law (Washington Post, Jan. 19).
• In February, the Department of Health and Human Services (HHS) ruled that college health insurance plans had to comply with health reform’s requirements. Previously, they were exempt (GetInsured.com blog, Feb. 15).
• To commemorate Mother’s Day in May, HHS secretary Kathleen Sibelius highlighted four parts of the overhaul that aim to improve women’s health (May 13). In August, health insurers were required to begin covering women’s preventive care, such as contraception and screenings, by the following August (Aug. 1).
• Also in May, HHS decreased premiums and eased enrollment processes for federally-administered preexisting condition health insurance plans (June 6).
• In June, HHS moved toward phasing out ‘mini-med’ health insurance plans, which are inexpensive but have very limited benefits, by setting a September deadline for waiver applications (June 21).
• In July, HHS awarded low-interest loans to non-governmental groups to help them introduce Consumer Oriented and Operated Plans, also known as co-ops (July 20).
• Health reform originally included a long-term care insurance program known as CLASS. In October, however, officials deemed the program financially unviable, and decided to drop it (Oct. 21).
• Courts and experts continued to debate the constitutionality of the individual health insurance mandate. In November, a D.C. appeals court ruled in favor of the mandate (Nov. 12) and the Supreme Court announced that it will rule on the case in early 2012 (Nov. 14).

Health Insurance Exchanges. The federal government and states came closer to shaping online health insurance exchanges in 2011. The exchanges are set to launch in 2014.

• In August, HHS unveiled standardized health insurance forms to simplify the insurance shopping and selection process (Aug. 17).
• The Institute of Medicine and HHS worked to define what health benefits are considered ‘essential’ (Oct. 11), but ultimately, HHS decided to leave that decision to the states (@GetInsuredCom, Dec. 29)
• In December, Minnesota launched demos of several health insurance exchange modules for public comment (including one developed by us!) (Dec. 12).
• States voted on whether to use the federal exchange or establish their own, set up exchange committees, and took other steps forward during the past year. Many of these are noted on our Twitter feed.

Medicare and Medicaid. These programs for the elderly and poor were often threatened due to a tough economic climate, but they made some innovative and interesting changes.

• In April, Medicaid announced a new grant program for states to incentivize healthy behaviors, like losing weight and quitting smoking, that reduce health costs (Apr. 13).
• In December, Rep. Paul Ryan and Sen. Ron Wyden proposed a Medicare reform plan that would provide seniors with subsidies to enroll in a public or private insurance plan (Washington Post, Dec. 14).

State Changes. At the state level, lawmakers enacted a variety of policies designed to improve health, including many related to health insurance.

• In January, Michigan voted to provide health benefits to domestic partners of its state employees (Feb. 9).
• During the first few months of the year, states established open enrollment periods for child-only health insurance plans (Mar. 8).
• In April, Massachusetts proposed a method of dealing with the rising cost of healthcare by replacing the traditional fee-for-service model with integrated care (Apr. 19).
• States began implementing the medical loss ratio rule, which required insurers to spend at least 80% of premiums on care or quality improvement. In July, five states got more time to put this new rule into effect (July 25). In December, despite lobbying by insurance brokers, HHS defined broker fees as an administrative cost, not falling under that 80% (Dec. 5).
• In September, after several months of debate, California voted against state regulation of health insurance premium increases (Sep. 1).
• Also in California, in October, lawmakers passed a bill to require individual-market plans to cover maternity care starting in July 2012 (Oct. 7).
• In November, New York mandated health insurance coverage of autism screening, diagnosis, and treatment starting in November 2012 (Nov. 2).
• Health insurance companies continued to propose premium increases, many of which were met with criticism. In November, HHS ruled for the first time that one Pennsylvania insurer’s proposed increase was unreasonable and asked the company to justify the increase (Nov. 22).

Mr. Klein writes that “in health policy, 2011 might be best viewed as the year of getting ready.” Looking at the policy topics we’ve covered during the past year, he may be right: several bills were passed and committees convened, but their implementation and action won’t get rolling until 2012 and later.

Readers, as 2011 draws to a close, what are your thoughts on this year in health? Did we make the kind of progress you hoped to see?

Online health insurance exchanges run by the states and federal government are a key part of health reform. But how will these exchanges work? Will an online interface make it easier to enroll, manage your account, and find providers?

Here’s your chance to find out. GetInsured.com, along with several other companies, has developed sample modules for Minnesota’s state-based exchange, designed to give you a sense of what the exchange will look like and an opportunity to offer feedback. As the Minnesota Department of Commerce mentions on its module testing website, the exchanges will allow you to:

• For individuals – determine eligibility and enroll
• For small businesses – determine eligibility and enroll
• View the options and costs of various health plans
• View a list of certified brokers and navigators
• Find information on doctors and hospitals
• Aggregate and pay premiums
• Administer your account

We’ve developed sample modules for individual and small business eligibility, broker and navigator lists, and information on providers. Our demo isn’t fully functional, so you can’t use it to actually enroll in coverage, but we hope you’ll get a good taste of what we’re planning.

So, readers, we urge you to try it out. And please let us know what you think, either in the comments below or through the demo’s survey. Our goal was to create an exchange that is comprehensive, easy and quick to use, and maybe even educational and fun. Did we succeed?

More on the online demos, from Elizabeth Stawicki of Minnesota Public Radio:

• 12/5/11: Minnesotans can test drive health care exchanges starting Monday [text]
• 12/5/11: Health exchange demonstrations online for public review [audio and text]

In July, we blogged about two major approaches that states are taking to online health insurance exchanges: active purchasing, where exchanges negotiate contracts with health plans to get the best prices and values for their consumers, and passive or “open” purchasing, where the exchange serves as a centralized source of information on health plans but offers no special deals and allows all insurers to participate. Both approaches have their good and bad sides; while active purchasing may result in better prices, it requires the state to put in much more work, a difficult task in these times of fiscal austerity.

Now, the American Medical Association (AMA) has joined health insurance companies in endorsing the open marketplace approach, according to a new resolution described by Alina Selyukh of Reuters. According to Ms. Selyukh, the AMA delegates voted in favor of exchanges “with strong patient and physician protections in place, to increase competition and maximize patient choice of health plans.” The association worries that an active purchasing strategy could lead to overly concentrated markets in some states (which many states already have). This, they say, could limit negotiations between doctors and insurance companies as well as free competition between health plans.

The resolution is not surprising. In fact, it comes on the heels of a news piece by Emily Berry of the American Medical News, published by the AMA, which describes the low levels of competition in many states’ insurance markets and the AMA’s hope that health insurance exchanges will change that. “The AMA envisions that health insurance exchanges created by the health reform law will have a critical role in expanding insurer competition. Millions of currently uninsured Americans will benefit from having a patient-friendly market with more health insurance choices tailored to meet their needs,” AMA President Peter W. Carmel is quoted as saying. Similar to the KFF study we blogged about last month, the AMA recently found that 83% of the metropolitan areas it studied, and 39 out of 47 states, are highly concentrated.

Readers, which approach do you support, active or passive (open) purchasing? Whose needs matter most as states make this decision: patients, doctors, state governments, insurance companies, others?

Earlier this year, we blogged about the role of health insurance exchanges, a product of health reform, and the varied approaches states and their policymakers are taking toward defining their role. In particular, we focused on the debate between active and passive purchasing strategies, and explained some of the related issues and challenges.

Among those issues was the amount of competition in the state’s health insurance market, which matters because users will use online exchanges to directly compare plans. As you may imagine, consumers in some states have more insurance options than in others. To shed some light on this issue, the Kaiser Family Foundation (KFF) recently published a brief describing the competitiveness of state health insurance markets for individuals and small businesses.

KFF measured competitiveness in multiple ways and analyzed their results for the individual and small group markets. Individual consumers will make up a large portion of the online exchange market; in fact, the Congressional Budget Office estimates that by 2016, 22 million people will be buying individual coverage through the exchanges.

According to KFF’s analysis, many states currently have highly concentrated individual health insurance markets, meaning that they are dominated by a single insurer. In 30 states and the District of Columbia, the most popular insurer had a market share of more than 50%. Generally, states in the West had a more competitive market than those in the upper Midwest, South, and mid-Atlantic.

Another way to measure competitiveness is to count the number of insurers with a significant share of the market, in this case 5%. States varied quite a bit on this measure. 13 states had five or more major carriers, while the remaining 38 had four or fewer.  Interestingly, the analysts found that some states with highly concentrated markets had additional major carriers with a small market share, suggesting that they may one day become more competitive.

So, what does this mean for you, consumers who may one day be using online exchanges to buy insurance? Unfortunately, it’s hard to say. The advent of exchanges may urge insurers to open up practice in new states, reduce their role in states where they already operate, or specialize in certain types of insurance, changing the market between now and 2014. The competition that exchanges allow could also shift market shares around, changing the picture presented in the KFF analysis.

With funding from the Robert Wood Johnson Foundation, the Georgetown Health Policy Institute recently published options for states and Exchanges to consider in improving healthcare quality for their residents. These options are not required by the ACA and are intended for states with the resources to further quality improvement goals. In this article, we address some of the strategies proposed in the Georgetown findings that have promise.

Highly Specific Quality Ratings. Although the ACA requires Exchanges to provide quality ratings for plans offered, Exchanges can set higher standards than ACA requirements. The Georgetown article proposes that Exchanges can provide quality metrics based on specific health care services. For example, a user can assess which plans perform better for managing diabetes vs. high blood pressure.

We support a robust quality ratings system for state Exchanges. NCQA HEDIS and CAHPS scores, as well as other performance measures, help inform consumers and can only be positive for quality improvement efforts. Getinsured.com is the first private health insurance Exchange in the nation to integrate NCQA ratings into its plans.

Aligning Reimbursement and Quality Improvement Strategies. The authors propose that such aligning could be done for both public and private health plans. The intention is to have a “critical mass” of health plans notifying provider networks about quality improvement issues. We support this option as long as the alignment between reimbursement and quality improvement strategies are clear, reasonable and not too burdensome on health care providers.

Piggybacking on Federal Efforts. The federal government has various quality improvement strategies to complement state efforts. HHS is providing Exchange Establishment Grants that states can seek to limit the cost of their quality improvement plans. There are also national quality improvement programs for states to look to such as the National Quality Strategy and Medicare Advantage quality ratings.

Performance Based Contracting. The authors propose that the quality standards bar to sell plans on the Exchange be higher than those required under the ACA. This would make the Exchange selective contractors rather than market organizers, an area of contention in some states and for good reason. However, creating additional quality criteria for QHP certification may strengthen the partnership between the Exchange and plan carriers, creating more bargaining power in pushing quality improvement standards on health care providers.

Quality improvement is a goal that most if not all health reform stakeholders can sign onto. For this reason, it is a good idea for state Exchanges to set the groundwork for incenting quality improvement early, so that future efforts can build on it. The above strategies encourage such groundwork, and states should gauge community support for each in preparing their Exchanges for 2014.

State-based health insurance exchanges – online marketplaces for health insurance coverage – are a key piece of the 2010 health reform law. Recently, the National Governors Association (NGA) released an issue brief summarizing the goals that states might pursue when it comes to health insurance exchanges and children, and how states could try to maximize kids’ access not only to insurance coverage, but to other programs administered by the state. NGA cites the importance of market and policy decisions, such as regulating the plans that are available, the ways in which they share risk, and the role of brokers; as well as operational decisions, such as enrollment processes and the mechanics of the online exchange.

According to the NGA, goals for children’s coverage include “promoting continuity of coverage, creating a one-stop portal for public programs, maintaining benefit packages and cost-sharing requirements, and emphasizing outreach activities.” Shifting eligibility rules and other changes resulting from health reform will lead to many changes in children’s health insurance in the next few years, and the authors of the issue brief emphasize the importance of maintaining kids’ coverage throughout this transition.

Continuity of coverage becomes important near the edges of eligibility rules – for example, when a family’s income is on the threshold of being eligible for Medicaid, and the child may go back and forth between Medicaid coverage and coverage through the exchange. NGA suggests that states encourage health insurers and plans to participate in both types of programs, so that children can keep similar coverage through changes in family income.

Using a health insurance exchange as a one-stop portal for public programs would, once fully implemented, simplify paperwork for both states and their residents. For example, if two unrelated social services programs have similar eligibility requirements, a person would have to apply only once, and information could be stored in the system for future use. The challenge in meeting this goal is putting that system into place; states run numerous programs, and creating an integrated portal would take a lot of work up front.

Maintaining benefit packages and cost-sharing requirements is important for children and families who currently or may in the future rely on specific benefits from these programs. According to the NGA, children who transition between Medicaid and exchange-based insurance would, ideally, maintain not only their coverage, but also the details of that coverage. If the benefits and cost-sharing rules change from plan to plan, enrollees would experience more confusion, administration would be more complicated, and unexpected medical expenses would be more common.

Lastly, NGA emphasizes the importance of outreach and marketing, in order to get consumers aware of the options that are available and enrolled in the plans that best suit them. NGA suggests that states, familiar with outreach for Medicaid and other existing public programs, apply the same strategies when reaching out to people who would use an exchange. Brokers, who also have an incentive for enrolling more customers, should be involved as well.

Readers, how open are you to buying insurance for your child through an exchange? Are there other issues that states should have on their radar as they continue to design their exchanges?

Online health insurance exchanges are new, uncharted territory for many groups. Several of our recent tweets and blog entries have considered the challenges that states and the federal government are facing in deciding how to organize and run these new programs, but what about the technology companies that will actually be building them?

According to an article by Alina Selyukh of Reuters, the tech world is excited about this new opportunity. Companies like Hewlett Packard, Deloitte, Dell, and Oracle are vying for contracts to create the exchanges, which could be worth $5-100 million per state. States that want their own exchanges have less than a year and a half to present their plans to the federal government, and so for tech companies wanting to get involved, the time is now.

As the new, state-based exchanges take shape, what many people forget is that health insurance exchanges already exist. We’re one example. Ms. Selyukh writes, “An average exchange would allow people or small businesses to shop around for an insurance plan similar to how one would shop for insurance on online broker sites such as eHealthInsurance.com or GetInsured.com.”

For those who may be new to our blog and our site, Getinsured.com is a commercial health insurance exchange that has operated since 2005 and services over one million customers per year. We focus on the individual market, helping people electronically shop, compare and enroll in over 6,000 health insurance plans from 49 of the nation’s leading carriers. With so many choices, our talented brokers work with customers to find the best, most affordable plan that fits their health insurance needs.

But it doesn’t stop there. Getinsured.com also specializes in customizing exchange solutions to meet the diverse needs of state governments. Our exchange software and support services are comprehensive and available both independently and as an integrated whole, allowing our government customers to create a flexible plan with the features they want.

A couple of weeks ago, we blogged about two schools of thought on the role of health insurance exchanges, online health insurance marketplaces that will be created by each state as part of health reform. By combining individuals and small businesses into a larger group, exchanges will reduce customers’ collective risk, increasing their purchasing power and access to an affordable plan.

The White House’s original description of how exchanges would look left plenty of room for creativity on the part of states, provided they were ready by 2014. Since then, states have formed committees to explore options and begun establishing and planning their systems – some with the help of federal funds.

Yesterday, the Department of Health and Human Services (HHS) proposed new guidance on exchanges. The agency is accepting public comment on these ideas for the next 75 days. According to an article by Robert Pear of the New York Times, the new rules include:

• An “operational assessment” of each state’s exchange in January 2013, one year before they must be ready. For any state that is not able to (or unwilling to) operate its exchange, the federal government may take over its operation. In an article for Reuters, Alina Selyukh and Anna Yukhananov explain that the deadline offers some flexibility on timing for states that want to participate but are not fully ready by 2014.
• Subsidies to help customers afford insurance coverage through the exchange. People with incomes up to four times the poverty level will be eligible for assistance, on a sliding scale.
• Requirement that each state’s exchange certifies “qualified health plans,” includes standardized information comparing the costs and benefits of each plan, and rates plans based on the quality and price of the care they cover.

Every health plan must also offer a set of essential health benefits. What counts as “essential” is not yet determined, but HHS expects to have an answer later this year.

According to an article by Anna Wilde Matthews of the Wall Street Journal, these rules still leave states with lots of decisions. These include:

• How insurers can market their plans within the state
• What kind of networks of health providers plans must include
• How small-business versions of the exchanges will work and how much choice employees will have
• Whether to partner with the federal government to set up the exchange

As exchanges and other aspects of health reform are implemented in the next few years, HHS plans to issue more guidance in the next few years to help them take shape.