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(HealthNewsDigest.com) – The Health Insurance Exchange (HIX) system, legislation enacted under The Patient Protection and Affordable Care Act (ACA), is designed to act as a marketplace that gives consumers access to a variety of insurance plans from different providers.
The Exchanges will go into operation on Jan. 1, 2014 and are expected to cover as many as 29 million people nationwide by 2019, including 5 million with employer-based coverage. Those eligible include individuals without other coverage, individuals who can’t afford or have inadequate coverage, and small business employees.
The experience for participants, on the most simple of terms, will go something like this:
Enter information into a web portal.
Learn if they are eligible for programs such as Medicaid, CHIP, public subsidy options or employer-based insurance.
Shop, compare and choose a benefits plan that best suits their needs.
So what must happen between now and Jan. 1, 2014 so the Exchanges can function as designed, and consumers can benefit from a marketplace of insurance options? The Exchanges must be established, consumer-tools implemented, and education to the public on the options available to them through the Exchange must be initiated. This represents a great challenge to state resources. A list of regulations and deadlines governing HIXs includes:
States must have their HIX plans ready and certified by 2013 to begin open enrollment by Oct. 1, 2013 and full operations by Jan. 1, 2014. If states do not have their own plans, the federal government will establish an HIX for them.
As part of the HIX plan and certification, states must decide if they are going to build a new solution, unique to the state exchange or leverage products and services already available in the marketplace. This is known as the “build or buy” decision and can significantly impact the state’s ability to meet the HIX timeline.
States have the option of operating separate Exchanges for individuals and small businesses, or combining the Exchanges into a single entity that encompasses both groups. They also have several options regarding administration. A state may establish Exchanges for its different geographic areas, a single Exchange for the entire state, or it may join with other states to form a regional Exchange.
Health and Human Services has thus far allocated $241 million for development to “innovator states.”
While the focus of Exchanges is on individuals, families, and small businesses initially, large employers can join the Exchanges in 2017.
There are many decisions to be made, and states must consider options that meet both the needs of citizens and the law. Each state has unique demographic, business and cultural characteristics that should be considered when developing a HIX strategy, with the ultimate goal of reducing the number of the state’s uninsured and improving overall access to health insurance.
ACS and its strategic partners, CHOICE Administrators and Benefitfocus, recommend that states consider adopting the appropriate elements from a seven-step strategy to implement a HIX:
Adopt state-specific market insurance reforms.
Vest State Departments of Insurance (DOI) with the authority to determine “qualified” carriers and health benefit plan characteristics.
Consider using the state Exchange to subcontract eligibility determination to the State Medicaid program.
Certify licensed brokers and “Navigators” to review compensation plans to ensure ACA compliance.
Contract with a private sector, integrated Exchange IT platform to provide enrollment portal, customer service, and operational functions.
Consider state-sponsored independent Exchange governance model.
Establish state legislative oversight committee to supervise the Exchange.
It certainly isn’t a one-size-fits all strategy – some states may find that all seven steps are a good fit; others may find that they only need five of the steps. It’s important to tailor a strategy that works best for the individual needs of the state and its citizens.
Once decisions have been made about the design and process of the HIX, it’s time to think about the technology. Developing the technology to successfully implement a sustainable Exchange is no small task. It must support new business models; help screen and determine eligibility for government subsidies; handle different plan requirements; support employers, employees, individuals, brokers, and navigators; process premiums; and track cost sharing. It must also handle the estimated 28 million beneficiaries who will churn between eligibility for Medicaid, subsidized coverage, and small business coverage in any given year.
Many states have chosen to work with a third-party business partner to develop their HIX solution. A partner can help by providing expertise and knowledge of the laws, and making recommendations on a business model that enables and encourages flexibility and cost efficiency. Look for a partner who will help incorporate important factors of an ACA compliant Exchange solution, while also providing services to ensure a self-sustaining Exchange environment:
Outreach: strategic planning, education/training, navigator support, broker support and marketing.
Enrollment: single portal – “No Wrong Door” access to health insurance coverage, assisted and non-assisted support, proven online experience, seamless coordination and technology that will guide participants through the enrollment process.
Integration: Medicaid and SCHIP, subsidy program integration, individual and family plan coverage, and group coverage.
Experience: solutions in production, outreach and market adoption experience, plan data from hundreds of carriers, focused teams and speed to market.
There is no doubt that there is a lot to accomplish between now and Jan. 1, 2014. States that have not already begun planning and developing an HIX need to start today in order to meet the requirements and deliver on the intentions behind the act – creating a marketplace where people can compare benefits and prices and choose the plan that is best for them and their family.
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