Contributor: Jane Dubose
What do you get when you put 500 health plan executives, health benefits consultants and a few IT folks in a room with the federal official charged with implementing the upcoming health benefits exchanges? Lots of questions.
The clock is ticking toward open enrollment in the exchanges (as of Dec. 1, less than 10 months) and if anyone is counting the days and hours, it’s the health plans who will be making dozens of decisions on whether they will participate in state or federal exchanges, and if so, how.
Gary M. Cohen, deputy administrator and director of the Center for Consumer Information and Insurance Oversight, had a few answers, particularly around the operation of federally facilitated exchanges, or FFEs.
Speaking at an exchange conference sponsored by America’s Health Insurance Plans in Chicago, Cohen said 15 states have turned in the official yes to the feds and at least another five will do a state-federal partnership exchange. The fence sitters have until Dec. 14 to make a decision.
Cohen made it clear that the Health and Human Services Department is prepared to operate as many FFEs as it has to, despite skepticism that to operate more than half of the state exchanges in a matter of months is too big an order. “There WILL be an exchange in every state,” Cohen said.
Insurers that wish to be FFEs have until April 2013 to submit their proposals, but there will be a price for admission. Insurers will have to pay a fee of 3.5 percent of premium volumes in order to be on the FFE. That’s in addition to other fees insurers will pay to fund exchanges and other elements of the Affordable Care Act.
Cohen also said the government is working on a consumer-friendly application for individuals applying for coverage and that it will operate a 24-hour call center and the FFE website would have chat capabilities.
Insurers questioned everything from nuances on dental benefits to reinsurance rules to commissions for brokers and agents. They’re worried about churn, or the potential for exchange enrollees to flip from one plan design or carrier to the other, depending on their job or family status. They’re worried about how to collect premiums from individuals who may not have Internet access or a bank account. And others are worried that the ACA could actually drive up the percentage of uninsured. A compliance officer from a Wisconsin health plan said small retailers who are clients have said they plan to drop insurance, largely because the penalties for not doing so are not severe enough to keep them in.
The state and federal benefits exchanges are the biggest open door to new business, perhaps in the history of private health insurance. Figuring out how to play profitably in them will keep more than a few dozen insurers burning the midnight oil through 2013.
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