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Improving the Odds of Success for Insurance Exchange(s)

Improving the Odds of Success for Insurance Exchange(s). Jon Kingsdale, Ph.D. Executive Director, Mass. Health Connector For the NHPF & AHR January 8, 2010. Focus on the Feasible. Extremely challenging implementation Cost control harder than coverage expansion Most exchanges have failed

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Improving the Odds of Success for Insurance Exchange(s)

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  1. Improving the Odds of Success for Insurance Exchange(s) Jon Kingsdale, Ph.D. Executive Director, Mass. Health Connector For the NHPF & AHR January 8, 2010

  2. Focus on the Feasible • Extremely challenging implementation • Cost control harder than coverage expansion • Most exchanges have failed • Personal bias, as an executive

  3. How to Improve the Odds of Success for Exchange(s) • Define realistically a limited set of objectives for exchange(s) • Acknowledge & compensate for weaknesses in the two bills • Resource exchange(s) adequately and provide for their evolution

  4. Realistic Objectives • Reduce the administrative costs of buying insurance • Improve the consumer’s insurance shopping/buying experience • Add price resistance to premium-setting and insurers’ negotiations with providers

  5. Industry Resistance: Adverse Selection: Cost Control Tools: Excl. channel for Non-Group Evolutionary for other market segments Local flexibility/options Option to rate N-G separately Claims-based risk adjustment across each entire rating pool Forego large-group Bid for plan selection Standardize benefits over time Automate Weaknesses in Both Bills

  6. Market Sensitivity Regulator vs. Retailer Customer Experience Focus on non-group Delegate & de-centralize Emphasize customer experience Establish few, clear goals Encourage semi-independent agencies & self-funding Minimize ‘policing’ role Regulate carriers thru DoI Flexibility in plans/benefits Phase-in offerings by segment Run group premiums thru Exch. Don’t prescribe transparency Encourage pilots, research Weaknesses in House Exchange

  7. Scale Economies Geographic Portability Consistent Performance Exclusive channel for N-G Develop national “utility” resources e.g.: website, risk-adjustment tools National health plans Recipricity of regional plans Federal inter-operability standards for states Federal oversight, based on cost & customer service Sharing best practices Weaknesses in Senate Bill

  8. How to Resource/Evolve Exchange(s) • Semi-independent exchange(s), funded by surcharging transactions • Clear objectives, flexible means • Drive to electronic transactions and audit trails • Rigorous evaluation over time

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