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Navigating the ACA Exchange Environment: A Payer Perspective
February 28, 2011
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Agenda
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• Introduction — Why Dell?
• Health Insurance Exchanges (HIXs/Exchanges) in operation and in the Affordable Care Act (ACA)
• Working with Exchanges and “Lessons Learned”
• What’s Happening Now - And What To Do About It
• Moving Forward
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Introduction – Why Dell?
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Is there value in state-based Exchanges outside of ACA?
What should payers consider when looking at Exchange participation and/or support?
How can payers and states work together to build an Exchange that meets a wide range of goals and requirements?
Questions Worth Considering….
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Exchanges in Operation and in the ACA
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We Are Facing The Greatest Changes To Healthcare In More Than A Generation - And Exchanges Are At The Heart
New records in number of covered lives
New member demographics
New channel partners
New market mechanism
New product designs
New rules for managing members
New budget hit for states
Health Insurance Exchange
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In light of all the uncertainty, questions worth Considering:
Is there value in state-based Exchanges outside of ACA?
What should payers consider when looking at Exchange participation and/or support?
How can payers and states work together to build an Exchange that meets a wide range of goals and requirements?
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Goal of the Exchange Create a sustainable insurance marketplace for individuals, employers and employees
Create
Sustain
Insurance
Marketplace
Individuals
Employers/ Employees
• Launch a multi-channel (paper/phone/web) marketplace, with all necessary front and back-end infrastructure
• Develop an approach that is attractive to all stakeholders and is easy to use, meets federal and state requirements and generates sufficient revenue
• Certify plans as meeting Exchange coverage and access requirements
• Support (and even drive) competition among plans and provide a choice to consumers (individual and small group members) and employers
• Use competition to drive up choice and quality of plans and providers while driving down price
• Use competition to drive up choice and quality of plans and providers while driving down price
• Make it easy for employers to contribute to and support their employees’ health
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States will Use Flexibility from CMS to Tailor the Exchange that Best Meets Their Needs
Light Pragmatic Robust
• Lighter regulatory role • More “free market” by
promoting economic growth
• Satisfied with level of competition and quality
• More developed policy infrastructure
• Thinking beyond traditional (e.g., regional exchange)
• Highly developed policy and regulatory model
• Tradition of leadership and oversight
• Use to promote policy goals
• May receive waiver to create a simpler vision
• Primarily aggregates information
• Limited services to plans and members
• Some market management
• Commercial, off-the-shelf and low-risk solutions
• Remains flexible due to political shifts
• Active purchaser of insurance
• Standardized products • Robust functionality • Substantial support for
education and outreach
Sta
te
En
vir
on
me
nt
Exc
ha
ng
e
Ch
ara
cte
rist
ics
Utah? Maryland? California
Massachusetts
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To be Successful, Exchanges Must Engage a Variety of Stakeholders
Health Insurance Exchange
State Gov’t
Federal Gov’t
Health Plans
Local Stakeholders
Exchange Vendor(s)
Brokers Members
Providers Employers
Role of the Plan:
• Create products that meet the requirements of the Exchange
• Market their products (and by definition, the Exchange)
• Enroll members via the Exchange
• Service member needs
• Report, as required, to the Exchange and regulators
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Exchange Development Maturity Model
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Every Exchange will Go Through Some Version of Four Primary Phases
• Pass legislation • Assess capabilities
and market • Create road map
to 2014
• Select vendors • Design
architecture • Create standards • Develop risk
adjustment
• Obtain federal readiness
• Certify plans and products
• Engage consumers
• Market Exchange • Serve members • Monitor/regulate
performance
Phase 1: Plan & Engage
(2010-2011)
Phase 2: Design & Build
(2011-2013)
Phase 3: Test, Certify & Launch
(2012 – 2014)
Phase 4: Operate & Sustain
(2013 – 2014+)
• Provide input • Assess impact to
membership • Assess market/
characteristics of newly insured
• Provide input to design and architecture
• Create internal process/system change roadmap
• Make participation decisions
• Begin marketing • Prepare for
operations
• Enroll and serve members
• Receive and reconcile payment
Cri
tical A
cti
vit
ies
for
Exc
han
ge
C
riti
cal A
cti
vit
ies
for
Pla
ns
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Biggest Challenges Churn Movement of members between eligibility categories/subsidy levels
Customer Service Continuity between call centers
Outreach Educating newly insured on how to use insurance
Risk Adjustment & Product Design Sustainable approved products
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Working with Exchanges and “Lessons Learned”
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Payers Should Explore Opportunities and Challenges from the Operational to the Strategic
People
• Understanding each other’s worlds
• Managing stakeholders
• New members that may be significantly different from current customers
Process
• Administrative simplification
• Plan certification
• Member enrollment
Technology
• New integration partners (e.g., federal government)
• New integration points
• New shopping portals
Strategy
• Rethink channel & distribution strategy
• Product portfolio
• Re-balance risk portfolio
• Re-define business model
This is a significant opportunity to collaborate and join with states eager to test new strategies and reduce risk — take control now, or take the chance of losing it for good
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Lessons Learned Working Effectively
• Plans tend to have lots of iterations – need to work from defined benefits while at the same time trying to innovate
• Don’t expect the Exchange to build around you
• Need to meet them halfway, and sometimes further
• Likely to be largely healthy, but not know how to use insurance
• Education and outreach, in partnership, will be critical
Overly Complex Plan Design
Unwillingness to Change
Siloed Customer Service Models
Misunderstanding the Newly Insured
• Understand what the Exchange governance model is trying to achieve
• Understand the challenges Exchange leadership/staff face
Undervaluing the Relationship
• There will be multiple challenges under the new model: they need to be solved together
• Leverage both call centers and web portals
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What’s happening now—and what to do about it
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What to Expect Over the Next 6 Months
Continued uncertainty
Unpredictable implementation
progress at federal and state level
State-specific agendas and hybrid
solutions are emerging
Heightened levels of engagements
and scrutiny
Helping small businesses and job
growth
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Planning for the “What If…”
Ways the law could be significantly “impeded”
• Defunded by GOP Congress
• Partially repealed – key provisions declared unconstitutional
• Fully repealed – entire law declared unconstitutional
The PPACA goes down sometime between now and 2014?
What still exists if the law is impeded
• Rising healthcare costs • Significant uninsured/
underinsured population
• Stagnant quality • Badly fragmented
subsidized care/ insurance
• Powerful hospital/ACO groups going direct to employers
Ways an Exchange can still help
States: – Provide easy way to apply
subsidies – Encourage innovation by
carriers – Provides a counterweight
to consolidating hospital groups/ACOs
Plans: – Capture potentially very
attractive risk pool – Attract employers with
defined contribution health plans
– Grow share to increase leverage with providers
– Manage churn with appropriate “gap” products
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What Plans Should Be Doing Now
Engage
Educate
Evaluate
Prepare
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How We Can Help
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Dell Services Bringing Innovation to a Changing Health Payer Market
• Administrative application and outsourcing services
• More than 40 million members supported
• Business process services
• Implement open source technology solutions to increase efficiencies
• Aid disease management
• Help commercial and BCBS customers transition to a consumer-centric model
• Facilitate web-based transactions among all constituents to strengthen relationships
We support more than 100 insurers - and the only operating Exchange in the industry - with standard and custom solutions.
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Next Steps • Contact the Dell Services Payer Team
with questions: [email protected]
– Industry thought leadership: › Conference speakers
(www.dell.com/speakers-bureau)
› Future webinars
– Insight
– Strategy
– Execution
• Attend the AHIP Exchange Conferences – March 9-10, 2011
– June 15, 2011
– Nov. 16-17, 2011
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Key Takeaways
This is potentially the biggest change in healthcare since 1965
There are both opportunities and risks for health plans in this change
The impacts of change will be felt across the health plan
Key implementation decisions will have to be made before political uncertainty is resolved
Plans can participate in this change or have it thrust upon them
Thank You