Over the next couple of weeks, I want to write about the process that every insurancebureaucrat in the country is going through as we build plans for the 2015 Exchange openenrollment period. There are some things I am intimately familiar with as they have kept me atthe office until 3:30 in the morning the day before the filing was due as we needed to tweak due to new data and assumptions. There are other things I know happen but I don’t know what actually go into that process.
We’ve been building the skeletons of future plans for the past month now. One of the major constraints on planning is that we are waiting on guidance as to what will be allowed on the Exchanges next year. There are four major areas of pause. The first is what exactly will be included in essential health benefits next year by ICD-09 or ICD-10 coding schemas. The second is an extension of the debate over what “adequate accesS” should be. Is it a percentage of providers in an area, is it a minimum number of providers in a county, is it a ratio of providers to projected covered lives? How should providers with closed panels (those who willtreat current patients who change insurance but not take on new patients) be counted? What does adequate access look like? The third major area is a recalibration of how far off each company’s actuaries were on their original risk pool projections. Some companies assumed healthier populations, others assumed sicker populations that they’ll cover, so pricing has been all over the place.
The last major area of pause is what does the market look like in each state that a company plans to offer plans. Mayhew Insurance operates in a federal Exchange state, so we are in a free for all. As long as our plans meet acturial projections of coverage adequacy and we meet network adequacy standards, the Federal exchange will list Mayhew Insurance. The federal exchange is a clearinghouse.
Some states are much more involved. California for instance has specified what it wants to see in each plan. For example, a silver plan has a $2,000 deductible for a single contract, and standard co-pays for common services. Insurers are offering functionally identical benefit configurations. The source of cost differences can only be better administration, medical management (keeping people healthier) or on the provider side (network size and reimbursement policies). Under the California model, an insurer can’t offer a higher deductible for lower co-pays. Other states have active buying models as well for their exchange products, but offer more flexibility.
States have some time to decide if they want to move on or off the Federal Exchange and if they are off the Federal Exchange, they have the option to tweak how active they wish to be in the selection of plans that the Exchanges will sell.