Active and passive sellers on Exchange

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.

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14 replies
  1. 1
    Mnemosyne says:

    The Giant Evil Corporation I work for is self-insured, and they seem to be taking the tack of a few other companies and partnering with a local medical center to basically have a practice dedicated solely to employees of the GEC. I can’t decide if this is a good thing or a bad thing. One the one hand, I don’t like the idea of the GEC being anywhere near my medical information. On the other, they’re basically promising a closed HMO with its own full network of specialists (sort of like the Kaiser model) so you never have to go outside of the network for care. Plus they built it literally across the street from the main campus of the GEC, and within walking distance of several other major locations.

    ETA: The other downside of joining is that the partner hospital is a Catholic hospital, so gawd help you should you ever need reproductive care.

  2. 2
    andy says:

    @Mnemosyne

    The other downside of joining is that the partner hospital is a Catholic hospital, so gawd help you should you ever need reproductive care.

    Well, it is a Giant Evil Corporation- as they say, they’re features, not bugs, and all that…

  3. 3
    Just Some Fuckhead, Thought Leader says:

    Mrs. Fuckhead did some shopping on the exchanges today to see if it benefited her small company to abandon its workers to the exchange. She is hopping mad about the too high deductibles.

  4. 4
    Amir Khalid says:

    @andy:
    Then again, the particular Giant Evil Corp that employs Mnemosyne is known for being socially liberal, with regard to gay employees for instance. So I wonder if it has some alternative arrangement for women employees who need reproductive care that the Catholic hospital refuses to provide.

  5. 5
    catclub says:

    @Just Some Fuckhead, Thought Leader: Depending on the price, she could subsidize her employees who spend into the deductible.

    Exchange Policy with large deductible: $10,000 per employee
    previous budgeted insurance plan $11,000, assign $1000 per employee
    for deductible refunds – not sure whether to make this equitable or benefit the neediest.

  6. 6
    Higgs Boson's Mate says:

    Richard, thank you for the very comprehensible write up. It suggests to me that one of the reasons the ACA isn’t as popular as it should be is the lack of consistency state-to-state. The result is that it might appear to non-wonks as a kludge rather than an actual consistently applied plan.

  7. 7
    Mnemosyne says:

    @Amir Khalid:

    It’s always hard to say, though. It would definitely be one of my first questions (though I would couch it more in terms of long-term birth control rather than go straight to abortion, since one answer informs the other).

  8. 8
    Mnemosyne says:

    @Higgs Boson’s Mate:

    Someone was complaining yesterday that PPACA is organized state-to-state but, frankly, every country with a universal system organizes it that way, including Canada and Great Britain (their NHS is actually four separate NHS systems that collaborate — England, Wales, Scotland, and Northern Ireland). From an administrative point of view, it makes the most sense, but it also kind of requires states to not actively work against the system and accept the basic premise that all of their citizens should have access to some kind of healthcare.

  9. 9
    Higgs Boson's Mate says:

    @Mnemosyne:

    From an administrative point of view, it makes the most sense, but it also kind of requires states to not actively work against the system and accept the basic premise that all of their citizens should have access to some kind of healthcare.

    There’s the rub.Some of the states are run by pols who either don’t believe that (They already have ERs so what more do they need?) or who feel that making the ACA fail is more important than their citizens’ health.

  10. 10
    Richard Mayhew says:

    @Higgs Boson’s Mate: It is both dessert and a floor wax — it is a kludge, and a reasoanbly effective albeit not the most efficient one in the world.

  11. 11
    Ruckus says:

    @Richard Mayhew:
    Whenever there is even the slightest amount of money to be stolen made, is there anything we do besides build in inefficiencies to take advantage of?

  12. 12
    jl says:

    WP has been eating my comments.
    Try something real simple
    Thnx for helpful post. The link under ‘provider’ is bad.

  13. 13
    jl says:

    I was going tor provide a very nice link to Kaiser FF list of state exchanges with characteristics. Not sure that is one RM meant. but WP seems to be trashing comments with any links in them, even if formatted.

    My only question is if RM thinks states like CA will have more stable premiums and benefit designs, so less churn between plans and therefore more stable provider-patient relationships than pure clearinghouse states?

  14. 14
    jl says:

    OK, I give up trying to post a URL, nothing I try works. WP eats it all up.

Comments are closed.