Following the Supreme Court’s decision to uphold a core piece of healthcare reform, the Affordable Care Act (ACA), states are now under more pressure to act on key elements of the law. Passed in 2010, the ACA requires states to provide affordable health insurance plans, with the assistance of federal subsidies, to eligible individuals and small businesses via state health insurance exchanges (HIX).
Approximately half of all states waited for the Supreme Court verdict on whether to overturn the individual mandate before deciding how they would move forward with an exchange. For those states, full implementation deadlines are real and time is of the essence. Open enrollment for the individual and small group plans that will be sold in the exchanges begins in October 2013, leaving just more than a year for states to act.
The federal government has indicated that states have three courses of action from which to choose as they build HIXs.
- State-based exchanges: They can establish state-based exchanges wherein they build systems and manage enrollment affording them optimal flexibility as states are most in tune with the respective populations they serve.
- Federally-facilitated exchanges: On the other end, because not all states will be ready to develop and launch the marketplaces by the 2014 deadline, they can choose to allow for the federal government to establish and operate the exchange within their state.
- Federal/state partnership exchange: States can also choose to develop an exchange in partnership with the Department of Health and Human Services. With the partnership model, the exchange is federally-funded and operated but states administer components like plan management and consumer assistance functions for their individual populations.
With each course, relying on a flexible, scalable solution built with existing eligibility system interoperability in mind will be the cornerstone of health insurance exchange management and success.
There are states that recognized the long-term business benefits of creating and managing their own exchanges before the Supreme Court’s final ruling. Roughly half of states have either implemented successful, fully operational exchanges or are moving forward with exchange implementations today.
At Microsoft, we work with state leaders who have started the exchange rollout process; and in this blog series, we’ll be discussing some of their key learnings and the benefits they have seen with regards to leveraging our technology to serve their constituents.
For states interested in moving forward with an exchange in order to take advantage of the many benefits, such as improved care coordination and efficiencies, Microsoft recently convened a panel of experts in the HIX space from our partners bswift, Ceridian, Extend Health and Social Interest Solutions
to share their insights on health insurance exchanges. You can listen to the recorded panel discussion here
(select “An Hour with the Experts: Key Learnings for Implementing a State HIX”). Here are a few takeaways from the discussion:
Time is running out. The deadline may be January 1, 2014, but in reality, states need to be prepared to have all functionality ready to go by January 1, 2013. As Social Interest Solutions shared, in order to have three months of open enrollment, starting no later than October 1, 2013, certification needs to be obtained, information needs to be in, and all processes need to be set up ahead of time. There simply is no time to wait – states have to move now with the guidance that has been released.
Balance “buy versus build” and use trusted vendors. Given the critical timing component, it is important for states to take on a balanced approach between “buy versus build.” Since timing precludes developing everything from the ground up, procurement considerations become even more important. Our partner Extend Health recommended aligning with qualified and experienced vendors with subject matter expertise who understand the dynamics of the HIX space.
Don’t reinvent the wheel. Additionally, there are a number of parallels and valuable lessons learned by the private sector where exchanges have been operating for the better part of a decade, and states should look to these models for best practices and lessons learned. According to bswift, public sector requirements often mirror traditional private sector solutions, including carrier and vendor connectivity, ongoing administrative needs and billing functions.
Create value for stakeholders. Another critical point to consider in implementing a state HIX is providing a compelling reason for stakeholders to use your exchange versus selecting alternatives. Partner Ceridian made the point that only by demonstrating value and encouraging purchases by voluntary participants will you ensure long-term sustainability of your exchange.