If you can’t kill it, make money off it.
Many companies that run private health insurance exchange programs, such as electronic bulletin boards that consumers can use to compare and buy ordinary individual health insurance products, small group plans, or Medicare Advantage plans seem to be taking that approach toward the Patient Protection and Affordable Care Act of 2010 (PPACA) health insurance exchange program requirements.
If PPACA takes effect as written and works as drafters expect, new, government-supervised health insurance exchanges are supposed to start selling health insurance products that meet federal quality and comprehensiveness standards to individuals and small groups starting Jan. 1, 2014.
A state can run its own exchange, or several. A state also could join a multi-state exchange consortium or let the federal government provide exchange services for its residents.
A state can choose to farm out part of exchange administration to the government and handle some tasks itself, and it can run an exchange program as a government division or turn exchange management over to an independent nonprofit entity.
The U.S. Department of Health and Human Services (HHS) recently published what appear to be flexible rules that states can use when deciding how to structure exchange programs.
State insurance regulators have been talking about how they might go about setting up exchanges this week in National Harbor, Md., at the fall meeting of the National Association of Insurance Commissioners (NAIC), Kansas City, Mo.
Some companies have been taking a soft-sell approach, at least in their public relations efforts.
EHealth Inc., Mountain View, Calif. (NYSE:EHTH), the parent of eHealthInsurance.com, and Extend Health Inc., San Mateo, Calif., the manager of a private Medicare plan exchange, have put out press releases talking about the data they have cleaned from analyzing their customers’ buying patterns and survey responses.
The CHOICE Administrators Exchange Solutions unit of Word & Brown Companies, Orange, Calif., has distributed a release pointing out that it has been running a highly regarded private exchange program in California for 15 years. The program now serves 10,000 employers and 150,000 plan enrollees.
“There is another viable option for states deciding whether to go it on their own or default to a federal program,” Kevin Counihan, president of the unit, says in a statement in the release. “States should consider partnering with an organization that has the experience and track record of successfully running a private exchange.”
Teaming up with a company that already runs an exchange could be the fastest, easiest, best way to get an exchange program up and running, Counihan says.
“What we are hearing from states around the country is the need for the exchange to represent the unique demographic, business and cultural characteristics of their state,” Counihan says. “We meet that need in a way that doesn’t involve a federal agency getting involved in state decisions and policy making.”
Exchange support services firms of all size are also reaching out.
One is Connextions Inc., Orlando, Fla., a health insurance technology company that recently was acquired by OptumHealth.
OptumHealth, is, in turn, a unit of UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH).
Connextions sells sales and customer relationship management systems both to large health insurers and to public and private health insurance exchange programs.
Earlier this week, the company sponsored a webinar on the idea that private exchanges may be well-positioned to compete with the PPACA exchanges.
“Exchanges are not a 2014 issue,” according to Rob Panepinto of Connextions. “They are being leveraged successfully today.”
When insurers work with any kind of exchange, they may have an easier time with tasks such as controlling commission expenses and running wellness and condition management programs, Panepinto says.
Private exchanges may be especially well-suited for insurers or other players that are interested in matters such as establishing and building brand awareness, retaining customers, and cross-selling, Panepinto says.