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Life Health > Health Insurance > Your Practice

How private exchanges are thriving under PPACA

By Katie Kuehner-Hebert

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The 2010 passage of the Patient Protection and Affordable Care Act (PPACA) caused existing private health insurance exchange GetInsured.com to tweak its online platform to comply with the new law. But the actual implementation of PPACA has been spelling additional revenue opportunities for the Palo Alto, Calif., company.

GetInsured.com was formed in 2005 to primarily serve consumers who voluntarily purchased individual health insurance plans from carriers either on its online platform or through its call centers staffed with licensed brokers, explains Shankar Srinivasan, chief operating officer and co-founder.

“We started this so that consumers could get a greater transparency to health care,” Srinivasan says. “Even though it’s 15 percent of the GDP, it’s still very opaque.”

But now that individuals and many businesses are mandated to buy insurance policies for themselves or their employees under PPACA, GetInsured.com has found a variety of ways to expand its business model to take advantage of those mandates. Those include providing the software backbone for several state exchanges, such as Covered California in partnership with Accenture, the prime contractor for that exchange, says Scott Osler, vice president of business development. GetInsured.com has also built several state Small Business Health Options (SHOP) exchanges.

See also: Private exchange picture still blurry

“With the 2010 passage of the PPACA, we recognized that states would have to build exchanges to serve their populations, and that we had the software assets and capabilities that were mature and proven,” Osler says. “This was an opportunity to help states adopt our platform under a SaaS model.”

Getinsured.com’s story is one example of a larger trend of already-established private exchanges working to expand their business model under — and in many cases partner with — PPACA’s public exchanges.

Getinsured.com and several other private exchanges, including eHealthInsurance.com, last summer signed contracts with the Centers for Medicare & Medicaid Services, to enable connectivity between the private exchanges and the federal government’s HealthCare.gov, to determine consumer eligibility for tax subsidies to purchase PPACA-compliant plans.

“As with any product, consumers shop in different ways for health insurance, and we have factored this into the health insurance marketplace,” says Alicia Hartinger, a CMS spokeswoman. “Direct enrollment is one of many ways we are working to offer consumers a variety of ways to enroll in affordable coverage.”

While the federal government’s enrollment numbers include consumers who have enrolled through the private exchanges, CMS does not currently break out those figures, Hartinger says.

Consumers can log onto GetInsured.com to preliminarily figure out how much subsidy they could get by using the site’s eligibility estimator tool, Srinivasan says. But to officially validate whether in fact they actually do qualify — and for how much, consumers currently have to then click a link that redirects them to the federal HealthCare.gov, which uses IRS information to calculate any subsidies.

The federal site then redirects consumers back to GetInsured.com to complete the enrollment application, and then they are redirected to the website of the carrier of their chosen plan to make their first policy payment.

The state exchanges haven’t developed this capability yet, Srinivasan says, so consumers applying for plans on GetInsured.com are urged to call the company’s brokers, who then log onto state databases to confirm eligibility for subsidies. The brokers then offer to stay on the phone to guide consumers through the rest of the enrollment process, including payment.

Next year, Srinivasan says both the federal and state exchanges are hoping to make the process “more seamless,” by just having consumers click a button on GetInsured.com and then wait “hopefully for just a few seconds” for processing while the government exchanges confirm eligibility — with no redirects or phone calls to brokers.

While some kinks between the public and private exchanges need to be ironed out, the PPACA’s standardization of health care plans under three tiers — bronze, silver and gold — has enabled GetInsured.com to develop “more intelligent” decision-support capability so people can buy the plan that best fits their needs, Srinivasan says.

People can use the site’s new tool to evaluate their likely out-of-pocket costs for the upcoming year, by answering such questions as the type of coverage that is important to them based on whether they want to stay within particular networks or have an expanded menu of medications; how often they typically go to the doctor, whether they have any chronic conditions.

The tool then uses actuarial value calculations to evaluate what their likely out-of-pocket spend would be for the coming year. GetInsured.com then adds that cost to the premiums listed for each plan on the site, to give consumers “a total cost of ownership.” Consumers get a personalized ranking all of the health plans available via the GetInsured Plan Score.

GetInsured.com’s site also is more “user-friendly” than the public exchange sites, Osler says. “We have a simpler online experience with live brokers as advocates in our call centers, which is critical right now as there’s a lot of confusion in the marketplace.”

The use of private exchanges such as GetInsured.com to boost enrollment under PPACA is “also paving the way for the rapid growth of another quietly emerging channel,” CMS spokeswoman Hartinger said.

“Private health insurance exchanges have been incubating for several years, but the accelerated development of exchange products and technologies has employers increasingly re-evaluating traditional employee benefits,” she says.

Indeed, GetInsured now has a separate commercial exchange for large employers to give their employees and retirees a wider choice of carriers and plans, Osler said. That platform is increasingly being used by part-time workers and retirees who might be eligible for subsidies in the individual market.

“Employers are looking to shift costs and to alleviate the administrative burden in managing benefits,” he said. “Over time, I think having this type of access will get more employers to rethink how they will provide health care benefits to their employees.”

GetInsured.com might also revisit some services the site had originally offered in 2005, Srinivasan said. To give consumers “more predictability on their spend on health care,” the site had also offered them the ability to compare pricing of medical procedures from different networks. However the company stopped providing those services “because we couldn’t find a way to make money from it.”

“But now those issues have re-emerged and we might have a second go at that,” Srinivasan said.

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