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April 30, 2013 at 09:57 AM
Some health insurance issuer and broker executives seem to have been talking more about the Patient Protection and Affordable Care Act (PPACA) health insurance exchange program than about net income during their companies’ first-quarter earnings calls.
Mark Bertolini, the president of Aetna Inc. (NYSE:AET), and Gary Lauer, the chief executive officer (CEO) of eHealth Inc. (Nasdaq:EHTH), are two examples of executives who answered many questions about the PPACA exchanges during their companies’ calls.
PPACA requires the U.S. Department of Health and Human Services (HHS) to work with state agencies to set up exchanges, or Web-based insurance supermarkets, in all 50 states and the District of Columbia by Oct. 1.
Executives at WellPoint Inc. (NYSE:WLP) have suggested that their company will try to sell through the exchange in every state in which the company has a Blue Cross or Blue Shield license.
Executives at UnitedHealth Group Inc. (NYSE:UNH) have talked about taking a “selective” approach to getting exchange slots.
Bertolini said Aetna hopes to get slots in 14 states.
For exchange programs, Aetna will use provider networks that are only one-quarter to one-half the size of its normal health plan networks, Bertolini said.
Aetna expects many early individual exchange users to be low-income and moderate-income people who qualify for subsidies, and it is expecting typical small groups to shift toward some kind of PPACA exchange or private exchange program only gradually, Bertolini said.
In theory, employers could shift 5 million employees and dependents into the exchanges by 2016, “but that’s going to depend on how well these things work,” Bertolini said.
During the earnings call for eHealth, the parent of the eHealthInsurance.com commercial health insurance exchange site, Lauer said that eHealth wants to have the ability to feed consumers into exchange programs throughout the United States, and that the company is hoping that HHS and managers of state-run exchanges will want to use eHealth to help with enrollment.
EHealthInsurance.com is an insurance broker, and it generates revenue by charging consumers membership fees and by collecting commissions from health insurers and other insurers.
“We can pre-enroll people,” Lauer said. “We bear all that cost.”
Some people in goverment “think that they’re going to build the next Facebook or Google of the health insurance marketplace and that everyone will come,” Lauer said. “I think I know a little bit better about that.”
But most officials seem to be open to the idea of working with eHealth, Lauer said.
